Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 10, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-16577 | |
Entity Registrant Name | Flagstar Bancorp, Inc. | |
Entity Central Index Key | 0001033012 | |
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 | |
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 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | FBC | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding (in shares) | 56,729,797 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash | $ 216 | $ 220 |
Interest-earning deposits | 126 | 206 |
Total cash and cash equivalents | 342 | 426 |
Securitized HFS loans not sold | 2,058 | 0 |
Investment securities available-for-sale | 2,446 | 2,116 |
Investment securities held-to-maturity | 554 | 598 |
Loans held-for-sale ($4,365 and $5,219 measured at fair value, respectively) | 4,389 | 5,258 |
Loans held-for-investment ($12 and $12 measured at fair value, respectively) | 13,795 | 12,129 |
Loans with government guarantees | 814 | 736 |
Less: allowance for loan losses | (132) | (107) |
Total loans held-for-investment and loans with government guarantees, net | 14,477 | 12,758 |
Mortgage servicing rights | 223 | 291 |
Federal Home Loan Bank stock | 306 | 303 |
Premises and equipment, net | 413 | 416 |
Goodwill and intangible assets | 167 | 170 |
Other assets | 1,430 | 930 |
Total assets | 26,805 | 23,266 |
Liabilities and Stockholders’ Equity | ||
Noninterest bearing deposits | 6,551 | 5,467 |
Interest bearing deposits | 9,501 | 9,679 |
Total deposits | 16,052 | 15,146 |
Short-term Federal Home Loan Bank advances and other | 5,841 | 4,165 |
Long-term Federal Home Loan Bank advances | 1,000 | 650 |
Other long-term debt | 493 | 496 |
Other liabilities ($35 and $35 measured at fair value, respectively) | 1,577 | 1,021 |
Total liabilities | 24,963 | 21,478 |
Stockholders’ Equity | ||
Common stock $0.01 par value, 80,000,000 and 80,000,000 shares authorized; 56,729,789 and 56,631,236 shares issued and outstanding, respectively | 1 | 1 |
Additional paid in capital | 1,487 | 1,483 |
Accumulated other comprehensive income | 31 | 1 |
Retained earnings | 323 | 303 |
Total stockholders’ equity | 1,842 | 1,788 |
Total liabilities and stockholders’ equity | $ 26,805 | $ 23,266 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Loans held-for-sale, fair value | $ 4,365 | $ 5,219 |
Loans held-for-investment, fair value | 12 | 12 |
Liabilities and Stockholders’ Equity | ||
Other liabilities, fair value | $ 35 | $ 35 |
Stockholders' Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares outstanding (in shares) | 56,729,789 | 56,631,236 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest Income | ||
Loans | $ 181 | $ 155 |
Investment securities | 19 | 24 |
Interest-earning deposits and other | 1 | 1 |
Total interest income | 201 | 180 |
Interest Expense | ||
Deposits | 32 | 29 |
Short-term Federal Home Loan Bank advances and other | 12 | 17 |
Long-term Federal Home Loan Bank advances | 3 | 1 |
Other long-term debt | 6 | 7 |
Total interest expense | 53 | 54 |
Net interest income | 148 | 126 |
Provision for credit losses | 14 | 0 |
Net interest income after provision for credit losses | 134 | 126 |
Noninterest Income | ||
Net gain on loan sales | 90 | 49 |
Loan fees and charges | 26 | 17 |
Net return on mortgage servicing rights | 6 | 6 |
Loan administration income | 12 | 11 |
Deposit fees and charges | 9 | 8 |
Other noninterest income | 14 | 18 |
Total noninterest income | 157 | 109 |
Noninterest Expense | ||
Compensation and benefits | 102 | 87 |
Occupancy and equipment | 41 | 38 |
Commissions | 29 | 13 |
Loan processing expense | 20 | 17 |
Legal and professional expense | 6 | 6 |
Federal insurance premiums | 6 | 4 |
Intangible asset amortization | 3 | 4 |
Other noninterest expense | 28 | 22 |
Total noninterest expense | 235 | 191 |
Income before income taxes | 56 | 44 |
Provision for income taxes | 10 | 8 |
Net income | $ 46 | $ 36 |
Net income per share | ||
Basic (in dollars per share) | $ 0.80 | $ 0.64 |
Diluted (in dollars per share) | $ 0.80 | $ 0.63 |
Weighted average shares outstanding | ||
Basic (in shares) | 56,655,865 | 56,897,799 |
Diluted (in shares) | 57,189,923 | 57,590,272 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 46 | $ 36 |
Other comprehensive income, net of tax | ||
Investment securities | 34 | 16 |
Derivatives and hedging activities | (4) | 0 |
Other comprehensive income, net of tax | 30 | 16 |
Comprehensive income | $ 76 | $ 52 |
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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
CECL ASU Adjustment to RE | $ 1,570 | $ 1 | $ 1,522 | $ (47) | $ 94 |
Beginning balance (in shares) at Dec. 31, 2018 | 57,749,464 | ||||
Beginning balance at Dec. 31, 2018 | 1,570 | $ 1 | 1,522 | (47) | 94 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 36 | 36 | |||
Total other comprehensive income | 16 | 16 | |||
Shares issued from Employee Stock Purchase Plan (in shares) | 32,878 | ||||
Shares issued from Employee Stock Purchase Plan | 0 | ||||
Stock-based compensation (in shares) | 27,401 | ||||
Stock-based compensation | 4 | 4 | |||
Dividends declared and paid (in shares) | 0 | ||||
Dividends declared and paid | (2) | (2) | |||
Repurchase of shares (in shares) | (1,329,657) | ||||
Repurchase of shares | (50) | (50) | |||
CECL ASU Adjustment to RE | 1,574 | $ 1 | 1,476 | (31) | 128 |
Ending balance (in shares) at Mar. 31, 2019 | 56,480,086 | ||||
Ending balance at Mar. 31, 2019 | 1,574 | $ 1 | 1,476 | (31) | 128 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
CECL ASU Adjustment to RE | 1,574 | 1 | 1,476 | (31) | 128 |
CECL ASU Adjustment to RE | 1,788 | $ 1 | 1,483 | 1 | 303 |
Beginning balance (in shares) at Dec. 31, 2019 | 56,631,236 | ||||
Beginning balance at Dec. 31, 2019 | 1,788 | $ 1 | 1,483 | 1 | 303 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 46 | 46 | |||
Total other comprehensive income | 30 | 30 | |||
Shares issued from Employee Stock Purchase Plan (in shares) | 59,252 | ||||
Shares issued from Employee Stock Purchase Plan | 0 | ||||
Stock-based compensation (in shares) | (39,081) | ||||
Stock-based compensation | (4) | 4 | |||
Dividends declared and paid (in shares) | (220) | ||||
Dividends declared and paid | (3) | 0 | (3) | ||
CECL ASU Adjustment to RE | 1,842 | $ 1 | 1,487 | 31 | 323 |
Ending balance (in shares) at Mar. 31, 2020 | 56,729,789 | ||||
Ending balance at Mar. 31, 2020 | 1,842 | $ 1 | 1,487 | 31 | 323 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
CECL ASU Adjustment to RE | $ 1,842 | $ 1 | $ 1,487 | $ 31 | $ 323 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Operating Activities | |||
Net cash used in operating activities | $ (1,515) | $ (4,716) | |
Investing Activities | |||
Proceeds from sale of AFS securities including loans that have been securitized | 104 | 4,501 | |
Collection of principal on investment securities AFS | 77 | 38 | |
Purchase of investment securities AFS and other | (350) | (16) | |
Collection of principal on investment securities HTM | 44 | 21 | |
Proceeds received from the sale of LHFI | 39 | 105 | |
Net origination, purchase, and principal repayments of LHFI | (1,706) | (845) | |
Acquisition of premises and equipment, net of proceeds | (17) | (18) | |
Net purchase of FHLB stock | (3) | 0 | |
Proceeds from the sale of MSRs | 36 | 41 | |
Other, net | 0 | (4) | |
Net cash (used in) provided by investing activities | (1,776) | 3,823 | |
Financing Activities | |||
Net change in deposit accounts | 906 | 1,073 | |
Net change in short-term FHLB borrowings and other short-term debt | 1,676 | (141) | |
Proceeds from increases in FHLB long-term advances and other debt | 350 | 100 | |
Repayment of long-term debt | (3) | 0 | |
Net receipt of payments of loans serviced for others | 298 | (104) | |
Stock repurchase | 0 | (50) | |
Dividends declared and paid | (3) | (2) | |
Other | (3) | 3 | |
Net cash provided by financing activities | 3,221 | 879 | |
Net increase in cash, cash equivalents and restricted cash | [1] | (70) | (14) |
Beginning cash, cash equivalents and restricted cash | [1] | 456 | 432 |
Ending cash, cash equivalents and restricted cash | [1] | 386 | 418 |
Supplemental disclosure of cash flow information | |||
Non-cash reclassification of LHFI to LHFS | 39 | 0 | |
Non-cash reclassification of LHFS to securitized HFS loans not sold | 2,170 | 4,501 | |
MSRs resulting from sale or securitization of loans | 40 | 67 | |
Operating section supplemental disclosures | |||
Proceeds from sales of LHFS | 7,674 | 832 | |
Origination, premium paid and purchase of LHFS, net of principal repayments | $ 8,786 | $ 5,479 | |
[1] | For further information on restricted cash, see Note 8 - Derivatives. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of Flagstar Bancorp, Inc. ("Flagstar," or the "Company"), including its wholly owned principal subsidiary, Flagstar Bank, FSB (the "Bank"), have been prepared using U.S. GAAP for interim financial statements. Where we say "we," "us," "our," the "Company," "Bancorp" or "Flagstar," we usually mean Flagstar Bancorp, Inc. However, in some cases, a reference to "we," "us," "our," the "Company" or "Flagstar" will include the Bank. These consolidated financial statements do not include all of the information and footnotes required by GAAP for a full year presentation and certain disclosures have been condensed or omitted in accordance with rules and regulations of the SEC. These interim financial statements are unaudited and include, in our opinion, all adjustments necessary for a fair statement of the results for the periods indicated, which are not necessarily indicative of results which may be expected for the full year. These consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities Securitized HFS loans not sold Trading securities arise as mortgage loans are securitized for sale in the normal of business. Trading securities are carried at fair value. Changes in fair value on trading securities are recorded in current period earnings. At March 31, 2020 , we held $2,058 million of these securities at fair value, which were comprised of U.S. government sponsored agency MBS. We had no trading securities at December 31, 2019 . The following table presents our AFS and HTM investment securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Dollars in millions) March 31, 2020 Available-for-sale securities Agency - Commercial $ 1,269 $ 17 $ (1 ) $ 1,285 Agency - Residential 971 33 — 1,004 Municipal obligations 30 — — 30 Corporate debt obligations 67 1 (1 ) 67 Other MBS 58 1 — 59 Certificate of deposits 1 — — 1 Total available-for-sale securities (1) $ 2,396 $ 52 $ (2 ) $ 2,446 Held-to-maturity securities Agency - Commercial $ 279 $ 3 $ — $ 282 Agency - Residential 275 12 — 287 Total held-to-maturity securities (1) $ 554 $ 15 $ — $ 569 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 Certificate of Deposits 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 (1) There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10 percent of stockholders’ equity at March 31, 2020 or December 31, 2019 . We evaluate AFS debt securities where the value has declined below amortized cost for impairment. If we intend to sell or believe it is more likely than not that we will be required to sell the debt security, it is written down to fair value through earnings. For AFS debt securities we intend to hold, we evaluate the debt securities for expected credit losses except for debt securities that are guaranteed by the U.S. Treasury, U.S. government agencies or sovereign entities of high credit quality for which we apply a zero credit loss assumption and represented 95 percent of our AFS portfolio as of March 31, 2020 . For the remaining AFS securities, credit losses are recognized as an increase to the allowance for credit losses through the credit loss provision. If any of the decline in fair value is related to market factors, that amount is recognized in accumulated other comprehensive income (OCI). We have no unrealized credit losses as of March 31, 2020 and December 31, 2019 . We separately evaluate our HTM debt securities for any credit losses. As of March 31, 2020 and December 31, 2019 , our entire HTM portfolio qualified for the zero loss assumption as all securities are guaranteed by the U.S. Treasury, U.S. government agencies or sovereign entities of high credit quality. 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. Accrued interest receivable on investment securities totaled $7 million and $6 million at March 31, 2020 and December 31, 2019 , and was reported in Other Assets on the Consolidated Statements of Financial Condition. Available-for-sale securities Securities available-for-sale are carried at fair value. Unrealized gains and losses on AFS securities are reported as a component of other comprehensive income. We purchased $350 million and $16 million of AFS securities, which were comprised of U.S. government sponsored agency MBS, certificate of deposits, and corporate debt obligations during the three months ended March 31, 2020 , and March 31, 2019 respectively. In addition, we retained $18 million of passive interests in our own private MBS during the three months ended March 31, 2020 . We did no t retain any interest in our own private MBS during the three months ended March 31, 2019 . There were no in sales of AFS securities during both the three months ended March 31, 2020 , and March 31, 2019 other than those related to mortgage loans that had been securitized for sale in the normal course of business. Held-to-maturity securities Investment securities HTM are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the interest method. Unrealized losses are not recorded to the extent they are temporary in nature. There were no purchases or sales of HTM securities during both the three months ended March 31, 2020 and March 31, 2019 . The following table summarizes available-for-sale and held-to-maturity securities, 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) March 31, 2020 Available-for-sale securities Agency - Commercial $ 35 4 $ — $ 91 9 $ (1 ) Municipal obligations $ — 1 $ — $ — — $ — Corporate debt obligations $ — — $ — $ 21 5 $ (1 ) Held-to-maturity securities Agency - Commercial $ 3 1 $ — $ 5 1 $ — 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 $ — Unrealized losses on available-for-sale securities have not been recognized into income because almost all of the portfolio held by us are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. The remaining unrealized losses on available-for-sale securities are municipal securities and corporate debt obligations, all of which are considered investment grade or are de minimis. The fair value is expected to recover as the bonds approach maturity. The following table 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) March 31, 2020 Due in one year or less $ 3 $ 3 2.04 % $ — $ — — % Due after one year through five years 11 11 2.68 % 9 9 2.49 % Due after five years through 10 years 102 104 4.03 % 8 9 2.28 % Due after 10 years 2,280 2,328 2.42 % 537 551 2.44 % Total $ 2,396 $ 2,446 $ 554 $ 569 We pledge investment securities, primarily agency collateralized and municipal taxable mortgage obligations, to collateralize lines of credit and/or borrowings. At March 31, 2020 and December 31, 2019 , we had pledged investment securities of $828 million and $874 million , respectively. |
Loans Held-for-Sale
Loans Held-for-Sale | 3 Months Ended |
Mar. 31, 2020 | |
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. LHFS totaled $4.4 billion and $5.3 billion at March 31, 2020 and December 31, 2019 , respectively. For the three months ended March 31, 2020 we had net gain on loan sales associated with LHFS of $89 million , as compared to $47 million for the three months ended March 31, 2019 . At March 31, 2020 and December 31, 2019 , $24 million and $39 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 | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans Held-for-Investment | 750 $ 40 $ 412 $ 202 $ 337 $ 316 $ 399 $ 68 $ 2 $ 1,776 700-750 35 257 146 132 92 192 35 1 890 <700 9 109 34 17 8 105 14 2 298 Home Equity >750 1 15 9 4 1 10 400 3 443 700-750 2 18 8 5 1 14 348 7 403 <700 2 13 7 2 1 10 144 3 182 Other Consumer >750 46 250 104 3 2 3 93 1 502 700-750 20 128 75 2 1 1 59 1 287 <700 2 14 20 1 1 1 28 2 69 Total consumer loans $ 157 $ 1,216 $ 605 $ 503 $ 423 $ 735 $ 1,189 $ 22 $ 4,850 Loan-to-value ratios primarily impact the allowance on mortgages within the consumer loan portfolio. The following table presents the amortized cost in residential first mortgages and home equity based on loan-to-value ratios: LTV Band Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage >90 $ 22 $ 321 $ 189 $ 49 $ 4 $ 23 $ — $ — $ 608 71-90 37 275 112 170 110 326 — — 1,030 55-70 18 109 41 146 158 209 — — 681 <55 8 73 40 121 144 137 117 5 645 Home Equity >90 — — — 1 1 15 — — 17 71-90 3 35 17 8 2 13 478 5 561 <=70 1 11 6 2 1 7 414 8 450 Total $ 89 $ 824 $ 405 $ 497 $ 420 $ 730 $ 1,009 $ 18 $ 3,992 Commercial Loans Risk rating and average loan duration have the most significant impact on the ACL for commercial loans. Additional factors which impact the ACL are debt-service-coverage ratio, loan-to-value ratio, interest-coverage ratio and leverage ratio. Internal audit conducts periodic examinations which serve as an independent verification of the accuracy of the ratings assigned. All loans are examined on an at least annual basis. 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. Based on the most recent analysis performed, the amortized cost basis, by risk category for each class of loans within the commercial portfolio is as follows: Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Commercial Loans Commercial real estate Pass $ 166 $ 999 $ 519 $ 546 $ 355 $ 278 $ (1 ) $ — $ 2,862 Watch 20 13 71 42 38 34 — — 218 Special mention — — 7 — — — — — 7 Substandard — — — 5 — — — — 5 Commercial and industrial Pass 236 614 277 332 184 114 24 — 1,781 Watch 1 6 6 42 — 1 1 — 57 Special mention — 11 18 9 — — — — 38 Substandard — — — 4 — — — — 4 Warehouse Pass — — — — — — 3,720 — 3,720 Watch — — — — — — 222 — 222 Special mention — — — — — — 31 — 31 Substandard — — — — — — — — — Total commercial loans $ 423 $ 1,643 $ 898 $ 980 $ 577 $ 427 $ 3,997 $ — $ 8,945" id="sjs-B4">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. We report LHFI at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and costs. The accrued interest receivable on loans held-for-investment totaled $36.1 million at March 31, 2020 and $36.9 million at December 31, 2019 and was reported in Other assets on the Consolidated Statements of Financial Condition. The following table presents our loans held-for-investment: March 31, 2020 December 31, 2019 (Dollars in millions) Consumer loans Residential first mortgage $ 2,964 $ 3,154 Home equity 1,028 1,024 Other 858 729 Total consumer loans 4,850 4,907 Commercial loans Commercial real estate 3,092 2,828 Commercial and industrial 1,880 1,634 Warehouse lending 3,973 2,760 Total commercial loans 8,945 7,222 Total loans held-for-investment $ 13,795 $ 12,129 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: Three Months Ended March 31, 2020 2019 (Dollars in millions) Loans Sold (1) Performing loans $ 38 $ 102 Total loans sold $ 38 $ 102 Net gain associated with loan sales (2) $ — $ 2 Loans Purchased Home equity $ — $ 49 Other consumer 63 51 Total loans purchased $ 63 $ 100 Premium associated with loans purchased $ — $ 3 (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 Statements of Operations. We have pledged certain LHFI, LHFS, and loans with government guarantees to collateralize lines of credit and/or borrowings with the FHLB of Indianapolis and the FRB of Chicago. At March 31, 2020 we had pledged loans of $8.3 billion , compared to $9.1 billion at December 31, 2019 . Allowance for Loan Losses We determine the estimate of the allowance for loan losses on at least a quarterly basis. The allowance for loan losses represents management's estimate of lifetime losses in our LHFI portfolio, excluding loans carried under the fair value option. We establish an allowance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance uses a loan-level, model-based approach, to estimate the expected lifetime credit losses. For non-performing loans, we've elected to use the collateral dependent practical expedient. The reserve for collateral dependent loans is established as the difference between fair value of the collateral less cost to sell and the amortized cost of the loan. Management applies judgment and assigns qualitative factors to each loan portfolio segment or the portfolio as a whole based upon the consideration of the following factors: levels of and trends in delinquencies and performance of loans, levels of and trends in write-offs and recoveries collected, changes in the nature and volume of the portfolio, changes in reasonable and supportable economic forecasts, changes in lending policies and procedures, changes in economic and business conditions, changes in lending management, changes in credit quality statistics, changes in the quality of the loan review system, changes in prepayment expectations or other factors affecting assessments of loan contractual term, changes in concentrations of credit, industry conditions 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 lifetime losses inherent on non-impaired loans by segmenting the portfolio based upon common risk characteristics. Our consumer loan portfolio is segmented into Residential First Mortgage, Home Equity and Other Consumer. Loan characteristics impacting these segments include lien position, credit quality, and loan structure. At a high-level our commercial loans are segmented into Commercial Real Estate, Commercial and Industrial, and Warehouse Lending. Loan characteristics impacting these segments include credit quality and loan structure. We measure the allowance using the applicable dual risk rating model which measures probability of default, loss given default and exposure at default. As of March 31, 2020 , we estimated losses over a two-year reasonable and supportable forecast period using a macroeconomic scenario before reverting economic variables over a one-year period to its long-term historical averages on a straight-line basis. As of March 31, 2020 , we forecasted that we are in a sudden, sharp and severe downturn as a result of the COVID-19 pandemic, only partially recovering later in the year. Our forecast includes an annualized GDP contraction of 18 percent during the second quarter, a 3 percent decrease in HPI throughout the remainder of the year, and a 9 percent spike in unemployment during the second quarter before moderating to 7 percent at the end of the year. The following table presents changes in the allowance for loan losses, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) Three Months Ended March 31, 2020 Beginning balance, prior to adoption of ASC 326 $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 Impact of adopting ASC 326 25 12 10 (14 ) (6 ) (4 ) 23 Provision (benefit) — (2 ) — 4 2 — 4 Charge-offs (1 ) (1 ) (1 ) — — — (3 ) Recoveries — — 1 — — — 1 Ending allowance balance $ 46 $ 23 $ 16 $ 28 $ 18 $ 1 $ 132 Three Months Ended March 31, 2019 Beginning balance $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Provision (benefit) (2 ) — 2 (12 ) 12 — — Charge-offs (1 ) — (1 ) — — — (2 ) Recoveries — 1 — — — — 1 Ending allowance balance $ 35 $ 16 $ 4 $ 36 $ 30 $ 6 $ 127 (1) Includes loans with government guarantees. The allowance for loan losses was $132 million at March 31, 2020 and $127 million at March 31, 2019 . The increase in the allowance is reflective of the adoption of CECL and an increase due to changes in the economic forecast used in the ACL models as a result of the ongoing COVID-19 pandemic, partially offset by sustained low delinquencies and charge-off levels. 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. In March 2020, as a response to COVID-19, customers facing COVID-19 related difficulties were offered forbearance in an effort to help our borrowers get to the other side of the health crisis when we believe they will be able to fulfill all of their contractual commitments. We cease the accrual of interest on all classes of consumer and commercial loans upon the earlier of, becoming 90 days past due, or when doubt exists as to the ultimate collection of principal or interest (classified as nonaccrual or nonperforming loans). When a loan is placed on nonaccrual status, the accrued interest income is reversed and the loan may only return to accrual status when principal and interest become current and are anticipated to be fully collectible. We do not measure an allowance for credit losses for accrued interest receivables as accrued interest is written off in a timely manner. We are not aging receivables for customers who have been granted a payment deferral in response to COVID-19 which remain in the aging category they were in at the time of payment deferral. We continue to accrue interest on these loans, consistent with our forbearance programs. The following table presents the amortized cost basis of loans for which the reserve is established based on collateral value, by class of loan: Balance at March 31, 2020 Real Estate Consumer loans Residential first mortgage $ 44 Home equity 20 Other 2 Total $ 66 As of March 31, 2020 , all loans for which the reserve is established based on collateral value are secured by collateral worth equal to or in excess of amortized cost. There were no impaired commercial loans as of March 31, 2020 . The following table sets forth the LHFI aging analysis of past due and current loans: 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due (1) Total Past Due Current Total LHFI (Dollars in millions) March 31, 2020 Consumer loans Residential first mortgage $ 8 $ 3 $ 24 $ 35 $ 2,929 $ 2,964 Home equity 2 1 3 6 1,022 1,028 Other 4 1 2 7 851 858 Total consumer loans 14 5 29 48 4,802 4,850 Commercial loans Commercial real estate 6 — — 6 3,086 3,092 Commercial and industrial (1) 1 — — 1 1,879 1,880 Warehouse lending — — — — 3,973 3,973 Total commercial loans 7 — — 7 8,938 8,945 Total loans (2) $ 21 $ 5 $ 29 $ 55 $ 13,740 $ 13,795 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 (1) Includes less than 90 day past due performing loans which are deemed nonaccrual. Interest is not being accrued on these loans. (2) Includes $4 million of past due loans accounted for under the fair value option for both March 31, 2020 and December 31, 2019 , respectively. Interest income is recognized on nonaccrual loans using a cash basis method. Interest that would have been accrued on impaired loans was less than $1 million during both the three months and twelve months ended March 31, 2020 and December 31, 2019 , respectively. At March 31, 2020 and December 31, 2019 , we had no loans 90 days past due and still accruing interest. Reserve for Unfunded Commitments We estimated expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. The reserve for unfunded commitments is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The reserve for unfunded commitments is reflected in other liabilities on the Statement of Financial Condition and was $20 million as of March 31, 2020 , compared to $3 million as of March 31, 2019 . The increase in the reserve is reflective of the adoption of CECL which requires us to record an allowance for our estimate of lifetime losses and an increase due to changes in the economic forecast used in the ACL models as a result of the ongoing COVID-19 pandemic. The following categories of off-balance sheet credit exposures have been identified: unfunded loans with available balances, new commitments to lend that are not yet funded, and standby and commercial letters of credit. For further information, see Note 15 - Legal Proceedings, Contingencies and Commitments. 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. Troubled debt restructurings ("TDRs") are modified loans in which a borrower demonstrates financial difficulties and for which a concession has been granted as a result. Nonperforming TDRs are included in nonaccrual loans. TDRs remain in nonperforming status until a borrower has made payments and is current for at least six consecutive months. Performing TDRs are not considered to be nonaccrual so long as we believe that all contractual principal and interest due under the restructured terms will be collected. 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. Refer to Note 1- Description of Business, Basis of Presentation, and Summary of Significant Accounting Standards to the consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the methodology used to determine TDRs. 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. Beginning in March 2020, as a response to COVID-19, we have offered our consumer and commercial customer’s principal and interest payment deferrals and extensions. We considered these programs in the context of whether or not the restructuring of these contracts would constitute a Troubled Debt Restructuring (TDR). We considered the CARES Act, interagency guidance and related guidance from the FASB, which provided that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not required to be accounted for as TDRs. The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) March 31, 2020 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home equity 17 2 19 Total TDRs (1)(2) $ 37 $ 10 $ 47 December 31, 2019 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home Equity 18 2 20 Total TDRs (1)(2) $ 38 $ 10 $ 48 (1) Allowance for loan losses on TDR loans totaled $5 million and $8 million at March 31, 2020 and December 31, 2019, respectively. (2) Includes $2 million of TDR loans accounted for under the fair value option at March 31, 2020 and December 31, 2019 . 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) (Dollars in millions) Three Months Ended March 31, 2020 Residential first mortgages 5 $ 1 $ 1 Home equity (2)(3) 2 — — Consumer 1 — — Total TDR loans 8 $ 1 $ 1 Three Months Ended March 31, 2019 Residential first mortgages 2 $ — $ — Home equity (2)(3) 2 — — Total TDR loans 4 $ — $ — (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 the fair value option. There was one residential first mortgage loans modified in the previous 12 months that subsequently defaulted during the three months ended March 31, 2020 . There were no residential first mortgage loans modified in the previous 12 months that subsequently defaulted during the three months ended March 31, 2019 . The increase in allowance at modification was less than $1 million for the three months ended March 31, 2020 and March 31, 2019 . All TDR classes within the consumer and commercial portfolios are considered subsequently defaulted when they are greater than 90 days past due within 12 months of the restructuring date. Impaired Loans The interest income recognized on impaired loans was less than $1 million for the three months ended March 31, 2020 and March 31, 2019 . 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 BASED 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. Payment activity, credit rating and loan-to-value ratios have the most significant impact on the ACL for consumer loans. The following table presents the amortized cost in residential and consumer loans based on payment activity: Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage Pass $ 85 $ 775 $ 377 $ 482 $ 416 $ 658 $ 116 $ 5 $ 2,914 Watch — 1 1 1 1 21 1 — 26 Substandard — 2 5 3 — 14 — — 24 Home Equity — Pass 4 47 23 11 3 17 890 12 1,007 Watch — — — — — 15 2 — 17 Substandard — — — — — 2 1 1 4 Other Consumer — Pass 68 391 197 6 3 8 179 3 855 Watch — — 1 — — — — — 1 Substandard — — 1 — — — — 1 2 Total consumer loans $ 157 $ 1,216 $ 605 $ 503 $ 423 $ 735 $ 1,189 $ 22 $ 4,850 The following table presents the amortized cost in residential and consumer loans based on credit scores: FICO Band Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage >750 $ 40 $ 412 $ 202 $ 337 $ 316 $ 399 $ 68 $ 2 $ 1,776 700-750 35 257 146 132 92 192 35 1 890 <700 9 109 34 17 8 105 14 2 298 Home Equity >750 1 15 9 4 1 10 400 3 443 700-750 2 18 8 5 1 14 348 7 403 <700 2 13 7 2 1 10 144 3 182 Other Consumer >750 46 250 104 3 2 3 93 1 502 700-750 20 128 75 2 1 1 59 1 287 <700 2 14 20 1 1 1 28 2 69 Total consumer loans $ 157 $ 1,216 $ 605 $ 503 $ 423 $ 735 $ 1,189 $ 22 $ 4,850 Loan-to-value ratios primarily impact the allowance on mortgages within the consumer loan portfolio. The following table presents the amortized cost in residential first mortgages and home equity based on loan-to-value ratios: LTV Band Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage >90 $ 22 $ 321 $ 189 $ 49 $ 4 $ 23 $ — $ — $ 608 71-90 37 275 112 170 110 326 — — 1,030 55-70 18 109 41 146 158 209 — — 681 <55 8 73 40 121 144 137 117 5 645 Home Equity >90 — — — 1 1 15 — — 17 71-90 3 35 17 8 2 13 478 5 561 <=70 1 11 6 2 1 7 414 8 450 Total $ 89 $ 824 $ 405 $ 497 $ 420 $ 730 $ 1,009 $ 18 $ 3,992 Commercial Loans Risk rating and average loan duration have the most significant impact on the ACL for commercial loans. Additional factors which impact the ACL are debt-service-coverage ratio, loan-to-value ratio, interest-coverage ratio and leverage ratio. Internal audit conducts periodic examinations which serve as an independent verification of the accuracy of the ratings assigned. All loans are examined on an at least annual basis. 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. Based on the most recent analysis performed, the amortized cost basis, by risk category for each class of loans within the commercial portfolio is as follows: Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Commercial Loans Commercial real estate Pass $ 166 $ 999 $ 519 $ 546 $ 355 $ 278 $ (1 ) $ — $ 2,862 Watch 20 13 71 42 38 34 — — 218 Special mention — — 7 — — — — — 7 Substandard — — — 5 — — — — 5 Commercial and industrial Pass 236 614 277 332 184 114 24 — 1,781 Watch 1 6 6 42 — 1 1 — 57 Special mention — 11 18 9 — — — — 38 Substandard — — — 4 — — — — 4 Warehouse Pass — — — — — — 3,720 — 3,720 Watch — — — — — — 222 — 222 Special mention — — — — — — 31 — 31 Substandard — — — — — — — — — Total commercial loans $ 423 $ 1,643 $ 898 $ 980 $ 577 $ 427 $ 3,997 $ — $ 8,945 |
Loans with Government Guarantee
Loans with Government Guarantees | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans with Government Guarantees | Loans with Government Guarantees Substantially all loans with government guarantees are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. FHA loans earn interest at a rate based upon the 10 -year U.S. Treasury note rate at the time the underlying loan becomes delinquent, which is not paid by the FHA or the U.S. Department of Veterans Affairs until claimed. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. We have reserved for these risks within other assets and as a component of our allowance for loan losses on residential first mortgages. Repossessed assets and the associated claims related to government guaranteed loans are recorded in other assets and totaled $40 million and $45 million , at March 31, 2020 and December 31, 2019 , respectively. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019 . 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 subservicer 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 Consolidated 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 16 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 3 Months Ended |
Mar. 31, 2020 | |
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 8 - Derivative Financial Instruments. Changes in the fair value of residential first mortgage MSRs were as follows: Three Months Ended March 31, 2020 2019 (Dollars in millions) Balance at beginning of period $ 291 $ 290 Additions from loans sold with servicing retained 40 67 Reductions from sales (36 ) (45 ) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (22 ) (11 ) Changes in estimates of fair value due to interest rate risk (1) (2) (50 ) (23 ) Fair value of MSRs at end of period $ 223 $ 278 (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 which we manage through the use of derivatives. The following table summarizes the hypothetical effect on the fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets: March 31, 2020 December 31, 2019 Fair value Fair value Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.56 % $ 220 $ 217 5.34 % $ 284 $ 280 Constant prepayment rate 12.04 % 206 191 10.59 % 271 257 Weighted average cost to service per loan $ 84.59 221 218 $ 84.41 285 282 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 16 - 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 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: Three Months Ended March 31, 2020 2019 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 21 $ 19 Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (22 ) (11 ) Changes in fair value due to interest rate risk (50 ) (23 ) Gain on MSR derivatives (2) 58 22 Net transaction costs (1 ) (1 ) Total return (loss) included in net return on mortgage servicing rights $ 6 $ 6 (1) Servicing fees are recorded on an 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: Three Months Ended March 31, 2020 2019 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 31 $ 24 Charges on subserviced custodial balances (2) (16 ) (12 ) Other servicing charges (3 ) (1 ) Total income on mortgage loans subserviced, included in loan administration $ 12 $ 11 (1) Servicing fees are recorded on an accrual basis. 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 | 3 Months Ended |
Mar. 31, 2020 | |
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 Operations. Derivatives designated as hedging instruments: We have designated certain interest rate swaps as fair value hedges of investment securities available for sale using the last-of-layer method. Cash flows and the profit impact associated with designated hedges are reported in the same category as the underlying hedged item. We have also designated certain interest rate swaps as cash flow hedges on LIBOR based variable interest payments on certain custodial deposits. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) on the Consolidated Statement of Financial Condition and reclassified into interest expense in the same period in which the hedge transaction is recognized in earnings. At March 31, 2020 , we had $4 million (net-of-tax) of unrealized losses on derivatives classified as cash flow hedges recorded in accumulated other comprehensive income (loss). We had no designated cash flow hedges at December 31, 2019 . The estimated amount to be reclassified from other comprehensive income into earnings during the next 12 months represents $2 million of losses (net-of-tax). Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and qualitatively thereafter, unless regression analysis is deemed necessary. All designated hedge relationships were and are expected to be highly effective as of March 31, 2020 . The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: March 31, 2020 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in cash flow hedge relationships: Assets Interest rate swaps on custodial deposits $ 800 $ 2 2026-2027 Derivatives in fair value hedge relationships: Assets Interest rate swaps on AFS securities 350 — 2024-2025 Total derivative assets $ 1,150 $ 2 Liabilities Interest rate swaps on AFS securities 100 — 2022 Total derivative liabilities $ 100 $ — Derivatives not designated as hedging instruments: Assets Futures $ 1,103 $ 1 2020-2023 Mortgage-backed securities forwards 232 39 2020 Rate lock commitments 8,318 169 2020 Interest rate swaps 878 66 2020-2030 Total derivative assets $ 10,531 $ 275 Liabilities Mortgage-backed securities forwards 9,548 278 2020 Rate lock commitments 27 — 2020 Interest rate swaps and swaptions 1,505 10 2020-2050 Total derivative liabilities $ 11,080 $ 288 (1) Variation margin pledged to or received from a Central Counterparty Clearing House 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, 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 day's 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 Statements of Financial Condition Net Amount Presented in the Statements of Financial Condition Gross Amounts Not Offset in the Statements of Financial Condition Gross Amount Financial Instruments Cash Collateral (Dollars in millions) March 31, 2020 Derivatives designated as hedging instruments: Assets Interest rate swaps on AFS securities $ — $ — $ — $ — $ 6 Interest rate swaps on custodial deposits 2 — 2 — 14 Total derivative assets $ 2 $ — $ 2 $ — $ 20 Liabilities Interest rate swaps on AFS securities $ — $ — $ — $ — $ 2 Total derivative liabilities $ — $ — $ — $ — $ 2 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 39 $ — $ 39 $ — $ — Interest rate swaps 66 — 66 — 3 Futures 1 — 1 — — Total derivative assets $ 106 $ — $ 106 $ — $ 3 Liabilities Mortgage-backed securities forwards $ 278 $ — $ 278 $ — $ 269 Interest rate swaps and swaptions (1) 10 — 10 — 31 Total derivative liabilities $ 288 $ — $ 288 $ — $ 300 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 (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day's fair value of open positions, is considered settlement of the derivative position for accounting purposes. 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 $1,403 million at March 31, 2020 and $287 million at December 31, 2019 of which $6 million and $1 million respectively, was due to the fair value hedge relationship. The closed portfolio of AFS securities designated in this last layer method hedge was $1.38 billion par (amortized cost of $1.38 billion ) at March 31, 2020 and $291 million par (amortized cost of $289 million ) at December 31, 2019 of which we have designated $450 million and $100 million at March 31, 2020 and December 31, 2019 , respectively. The net gain recognized on designated instruments, net of the impact of offsetting positions was zero for both the three months ended March 31, 2020 and March 31, 2019. At March 31, 2020 , we pledged a total of $325 million related to derivative financial instruments, consisting of $284 million of cash collateral on derivative liabilities and $41 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 $63 million related to derivative financial instruments, consisting of $34 million of cash collateral on derivatives and $29 million of maintenance margin on centrally cleared derivatives and had a de-minimis obligation to return cash on derivative assets at December 31, 2019 . Within the Consolidated Statements of Financial Condition, the collateral related to derivative activity is included in other assets and other liabilities and the cash pledged as maintenance margin is restricted and included in other assets. The following table presents net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended March 31, 2020 2019 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain (Loss) Futures Net loss on mortgage servicing rights $ 1 $ — Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights 38 13 Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 19 9 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (100 ) 8 Forward commitments Other noninterest income — 1 Interest rate swaps (1) Other noninterest income — 1 Total derivative (loss) gain $ (42 ) $ 32 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Home Loan Bank Advances The following is a breakdown of our FHLB advances outstanding: March 31, 2020 December 31, 2019 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 5,336 0.24 % $ 3,695 1.61 % Other short-term borrowings 505 0.20 % 470 1.64 % Total short-term Federal Home Loan Bank advances and other borrowings 5,841 4,165 Long-term fixed rate advances (1) 1,000 1.19 % 650 1.45 % Total long-term Federal Home Loan Bank advances 1,000 650 Total Federal Home Loan Bank advances and other borrowings $ 6,841 $ 4,815 (1) Includes the current portion of fixed rate advances of $0 million at both March 31, 2020 and December 31, 2019 . The following table contains detailed information on our FHLB advances and other borrowings: Three Months Ended March 31, 2020 2019 (Dollars in millions) Maximum outstanding at any month end $ 6,841 $ 3,391 Average outstanding balance 4,359 2,878 Average remaining borrowing capacity 4,977 3,314 Weighted average interest rate 1.32 % 2.45 % The following table outlines the maturity dates of our FHLB advances and other borrowings: March 31, 2020 (Dollars in millions) 2020 $ 5,841 2021 — 2022 — 2023 500 Thereafter 500 Total $ 6,841 Parent Company Senior Notes and Trust Preferred Securities The following table presents long-term debt, net of debt issuance costs: March 31, 2020 December 31, 2019 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 246 6.125 % $ 249 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus: 3.25%, matures 2032 $ 26 4.48 % $ 26 5.20 % 3.25%, matures 2033 26 5.08 % 26 5.24 % 3.25%, matures 2033 26 4.62 % 26 5.21 % 2.00%, matures 2035 26 3.83 % 26 3.99 % 2.00%, matures 2035 26 3.83 % 26 3.99 % 1.75%, matures 2035 51 2.49 % 51 3.64 % 1.50%, matures 2035 25 3.33 % 25 3.49 % 1.45%, matures 2037 25 2.19 % 25 3.34 % 2.50%, matures 2037 16 3.24 % 16 4.39 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 493 $ 496 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. During the quarter ended March 31, 2020, we purchased $3 million of the Senior Notes on the open market. This has been accounted for as a debt extinguishment in accordance with applicable GAAP. 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 March 31, 2020 , we had no deferred interest. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table sets forth the components in accumulated other comprehensive income (loss): Three Months Ended March 31, 2020 2019 (Dollars in millions) Investment Securities Beginning balance $ 1 $ (47 ) Unrealized gain 45 21 Less: Tax provision 11 5 Net unrealized gain 34 16 Reclassifications out of AOCI (1) — — Less: Tax provision — — Net unrealized gain reclassified out of AOCI — — Other comprehensive income, net of tax 34 16 Ending balance $ 35 $ (31 ) Cash Flow Hedges Beginning balance $ — $ — Unrealized gain (loss) (5 ) — Less: Tax provision (benefit) (1 ) — Net unrealized gain (loss) (4 ) — Reclassifications out of AOCI (1) — — Less: Tax provision — — Net unrealized gain (loss) reclassified out of AOCI — — Other comprehensive income (loss), net of tax (4 ) — Ending balance $ (4 ) $ — (1) Reclassifications are reported in noninterest income on the Consolidated Statements of Operations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share, excluding dilution, is computed by dividing earnings applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock or resulted in the issuance of common stock that could then share in our earnings. The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended March 31, 2020 2019 (Dollars in millions, except share data) Net income applicable to common stockholders $ 46 $ 36 Weighted Average Shares Weighted average common shares outstanding 56,655,865 56,897,799 Effect of dilutive securities Stock-based awards 534,058 692,473 Weighted average diluted common shares $ 57,189,923 $ 57,590,272 Earnings per common share Basic earnings per common share $ 0.80 $ 0.64 Effect of dilutive securities Stock-based awards — (0.01 ) Diluted earnings per common share $ 0.80 $ 0.63 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We had stock-based compensation expense of $3 million for both of the three months ended March 31, 2020 and March 31, 2019 . Stock Options No stock options have been granted by the Company since 2002. All remaining stock options expired January 22, 2020, unexercised. Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock units activity: Three Months Ended March 31, 2020 Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,399,127 $ 28.72 Granted 58,888 26.03 Vested (45,904 ) 29.47 Canceled and forfeited (30,189 ) 33.86 Non-vested balance at end of period 1,381,922 $ 28.47 2017 Employee Stock Purchase Plan A total of 800,000 shares of the Company’s common stock were reserved and authorized for issuance for purchase under the Employee Stock Purchase Plan (ESPP) of which 472,677 remain as of March 31, 2020 . There were 59,252 shares issued under the ESPP during the three months ended March 31, 2020 and the associated compensation expense was de minimis. |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Commitments | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 , 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 Liability On February 24, 2012, the Bank entered into a Settlement Agreement with the DOJ under which we agreed to make future payments totaling $118 million in annual increments of up to $25 million upon meeting all of the following 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 July 2016; and (c) the Bank having a Tier 1 Leverage Capital Ratio of 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 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 of the liability, see Note 16 - Fair Value Measurements. Other litigation accruals At March 31, 2020 and December 31, 2019 , excluding the fair value liability relating to the DOJ liability, our total accrual for contingent liabilities and settled litigation was $3 million . Commitments The following table is a summary of the contractual amount of significant commitments: March 31, 2020 December 31, 2019 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 8,345 $ 4,099 Warehouse loan commitments 2,258 1,944 Commercial and industrial commitments 741 1,107 Other commercial commitments 1,817 2,015 HELOC commitments 580 558 Other consumer commitments 272 175 Standby and commercial letters of credit 94 82 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 8 - Derivative Financial Instruments. Warehouse loan commitments. Lines of credit provided to mortgage originators to fund loans they originate and then sell. The proceeds of the sale of the loans are used to repay the draw on the line used to fund the loans. Commercial and industrial and other commercial commitments. Conditional commitments issued under various terms to lend funds to business and other entities. These commitments include revolving credit agreements, term loan commitments and short-term borrowing agreements. Many of these loan commitments have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being funded, the total commitment amounts do not necessarily represent future liquidity requirements. HELOC commitments. Commitments to extend, originate or purchase credit are primarily lines of credit to consumers and have specified rates and maturity dates. Many of these commitments also have adverse change clauses, which allow us to cancel the commitment due to deterioration in the borrowers’ creditworthiness or a decline in the collateral value. Other consumer commitments. 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. See Note 4 - Loans Held-for-Investment for additional information. 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 at March 31, 2020 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes in interim periods requires us to make a best estimate of the effective tax rate expected to be applicable for the full year, adjusted for any discrete items for the applicable period. This estimated effective tax rate is then applied to interim consolidated pre-tax operating income to determine the interim provision for income taxes. The following table presents our provision for income tax and effective tax provision rate: Three Months Ended March 31, 2020 2019 (Dollars in millions) Provision for income taxes $ 10 $ 8 Effective tax provision rate 18.5 % 18.4 % We believe that it is unlikely that our unrecognized tax benefits will change by a material amount during the next 12 months . We recognize interest and penalties related to unrecognized tax benefits in provision for income taxes. |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2020 | |
Banking and Thrift [Abstract] | |
Regulatory Matters | Regulatory Matters Regulatory Capital We, along with the Bank, must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that could have a material effect on the Consolidated Financial Statements. 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 March 31, 2020 and December 31, 2019 . 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) March 31, 2020 Tier 1 capital (to adjusted avg. total assets) $ 1,879 8.09 % $ 928 4.0 % $ 1,161 5.0 % Common equity Tier 1 capital (to RWA) 1,639 9.17 % 804 4.5 % 1,161 6.5 % Tier 1 capital (to RWA) 1,879 10.52 % 1,072 6.0 % 1,429 8.0 % Total capital (to RWA) 1,997 11.18 % 1,429 8.0 % 1,786 10.0 % 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 % $ 1271 8.0 % 1,589 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) March 31, 2020 Tier 1 capital (to adjusted avg. total assets) $ 1,900 8.19 % $ 928 4.0 % $ 1160 5.0 % Common equity Tier 1 capital (to RWA) 1,900 10.64 % 804 4.5 % 1,161 6.5 % Tier 1 capital (to RWA) 1,900 10.64 % 1,071 6.0 % 1,429 8.0 % Total capital (to RWA) 2,019 11.30 % 1,429 8.0 % 1,786 10.0 % 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 % |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
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 Statement of Financial Condition and by level in the valuation hierarchy. March 31, 2020 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Securitized HFS loans not sold Agency - Residential $ — $ 2,058 $ — $ 2,058 Investment securities available-for-sale Agency - Commercial $ — $ 1,285 $ — $ 1,285 Agency - Residential — 1,004 — 1,004 Municipal obligations — 30 — 30 Corporate debt obligations — 67 — 67 Other MBS — 59 — 59 Certificate of deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 4,365 — 4,365 Commercial Loan — — — — Loans held-for-investment Residential first mortgage loans — 10 — 10 Home equity — — 2 2 Mortgage servicing rights — — 223 223 Derivative assets Rate lock commitments (fallout-adjusted) — — 169 169 Futures — 1 — 1 Mortgage-backed securities forwards — 39 — 39 Interest rate swaps and swaptions — 68 — 68 Total assets at fair value $ — $ 8,987 $ 394 $ 9,381 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ — $ — Futures — — — — Mortgage backed securities forwards — (278 ) — (278 ) Interest rate swaps — (10 ) — (10 ) DOJ Liability — — (35 ) (35 ) Contingent consideration — — (16 ) (16 ) Total liabilities at fair value $ — $ (288 ) $ (51 ) $ (339 ) 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 Deposit — 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 — (8 ) — (8 ) DOJ litigation settlement — — (35 ) (35 ) Contingent consideration — — (10 ) (10 ) Total liabilities at fair value $ — $ (17 ) $ (46 ) $ (63 ) 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 Beginning of Period Total Gains (Losses) Recorded in Earnings (1) Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Period (Dollars in millions) Three Months Ended March 31, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 291 (72 ) 40 (36 ) — — 223 Rate lock commitments (net) (2)(3) 34 105 164 — — (134 ) 169 Totals $ 327 $ 33 $ 204 $ (36 ) $ — $ (134 ) $ 394 Liabilities DOJ Liability $ (35 ) $ — $ — $ — $ — $ — $ (35 ) Contingent consideration (10 ) (6 ) — — — — (16 ) Totals $ (45 ) $ (6 ) $ — $ — $ — $ — $ (51 ) Three Months Ended March 31, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 290 (34 ) 67 (45 ) — — 278 Rate lock commitments (net) (2)(3) 20 25 50 — — (58 ) 37 Totals $ 312 $ (9 ) $ 117 $ (45 ) $ — $ (58 ) $ 317 Liabilities DOJ Liability $ (60 ) $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (6 ) — — — — — (6 ) Totals $ (66 ) $ — $ — $ — $ — $ — $ (66 ) (1) There were no unrealized gains (losses) recorded in OCI during the three months ended March 31, 2020 and 2019 . (2) 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. (3) 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) March 31, 2020 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) (1) Mortgage servicing rights $ 223 Discounted cash flows Option adjusted spread 3.6% - 19.9% (5.6%) (1) Rate lock commitments (net) $ 169 Consensus pricing Origination pull-through rate 80.0% - 87.2% (81.2%) (1) Liabilities DOJ Liability $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (16 ) Discounted cash flows See description below See description below (2) 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 Liability $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (10 ) 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. For March 31, 2020 and December 31, 2019 , the weighted average life (in years) for the entire MSR portfolio was 3.3 and 4.1 , respectively. DOJ Liability. The significant unobservable inputs used in the fair value measurement of the DOJ Liability are the discount rate, asset growth rate, return on assets, dividend rate and the 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 15 - Legal Proceedings, Contingencies and Commitments. The DOJ Liability had a fair value adjustment of $25 million during 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 forecasted 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 are subject to measurement at fair value on a nonrecurring basis under certain conditions. The following table presents assets measured at fair value on a nonrecurring basis: Total (1) Level 2 Level 3 Gains (Losses) (Dollars in millions) March 31, 2020 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 15 — 15 (3 ) Repossessed assets (3) 10 — 10 (4 ) Totals $ 31 $ 6 $ 25 $ (8 ) 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 ) (1) The fair values are determined at various dates during the three months ended March 31, 2020 and the year ended December 31, 2019 , 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 table presents 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) March 31, 2020 Impaired loans held-for-investment Loans held-for-investment $ 15 Fair value of collateral Loss severity discount 0% - 40% (6.3%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (20.1%) (1) December 31, 2019 Impaired loans held-for-investment Loans held-for-investment $ 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) (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: March 31, 2020 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 342 $ 342 $ 342 $ — $ — Securitized HFS loans not sold 2,058 $ 2,058 — 2,058 — Investment securities available-for-sale 2,446 2,446 — 2,446 — Investment securities held-to-maturity 554 569 — 569 — Loans held-for-sale 4,389 4,390 — 4,390 — Loans held-for-investment 13,795 13,801 — 10 13,791 Loans with government guarantees 814 788 — 788 — Mortgage servicing rights 223 223 — — 223 Federal Home Loan Bank stock 306 306 — 306 — Bank owned life insurance 351 351 — 351 — Repossessed assets 10 10 — — 10 Other assets, foreclosure claims 40 40 — 40 — Derivative financial instruments, assets 277 277 — 108 169 Liabilities Retail deposits Demand deposits and savings accounts $ (7,007 ) $ (6,570 ) $ — $ (6,570 ) $ — Certificates of deposit (2,138 ) (2,161 ) — (2,161 ) — Wholesale deposits (561 ) (575 ) — (575 ) — Government deposits (1,164 ) (1,160 ) — (1,160 ) — Custodial deposits (5,182 ) (5,165 ) — (5,165 ) — Federal Home Loan Bank advances (6,841 ) (6,870 ) — (6,870 ) — Long-term debt (493 ) (452 ) — (452 ) — DOJ Liability (35 ) (35 ) — — (35 ) Contingent consideration (16 ) (16 ) — — (16 ) Derivative financial instruments, liabilities (288 ) (288 ) — (288 ) — 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, assets 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 Liability (35 ) (35 ) — — (35 ) Contingent consideration (10 ) (10 ) — — (10 ) Derivative financial instruments, liabilities (18 ) (44 ) — (43 ) (1 ) Fair Value Option We elected the fair value option for certain items as discussed throughout the Notes to the Consolidated Financial Statements 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: Three Months Ended March 31, 2020 2019 (Dollars in millions) Assets Loans held-for-sale Net gain (loss) on loan sales $ 234 $ 79 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: March 31, 2020 December 31, 2019 UPB Fair Value Fair Value Over / (Under) UPB UPB Fair Value Fair Value Over / (Under) UPB (Dollars in millions) Assets Nonaccrual loans Loans held-for-sale $ 4 $ 3 $ (1 ) $ 3 $ 3 $ — Loans held-for-investment 5 4 (1 ) 5 4 (1 ) Total nonaccrual loans $ 9 $ 7 $ (2 ) $ 8 $ 7 $ (1 ) Other performing loans Loans held-for-sale $ 4,151 $ 4,362 $ 211 $ 5,057 $ 5,216 $ 159 Loans held-for-investment 8 8 — 8 8 — Total other performing loans $ 4,159 $ 4,370 $ 211 $ 5,065 $ 5,224 $ 159 Total loans Loans held-for-sale $ 4,155 $ 4,365 $ 210 $ 5,060 $ 5,219 $ 159 Loans held-for-investment 13 12 (1 ) 13 12 (1 ) Total loans $ 4,168 $ 4,377 $ 209 $ 5,073 $ 5,231 $ 158 Liabilities DOJ Liability (1) $ (118 ) $ (35 ) $ 83 $ (118 ) $ (35 ) $ 83 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 15 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
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 are 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. As a result of Management's evaluation of our segments, effective January 1, 2020, certain departments have been re-aligned between the Community Banking and Mortgage Originations. Specifically, a majority of the residential mortgage HFI portfolio is now part of the Mortgage Origination segment. The income and expenses relating to these changes are reflected in our financial statements and all prior period segment financial information has been recast to conform to the current presentation. The Community Banking segment originates loans, provides deposits and fee based services to consumer, business, and mortgage lending customers through its Branch Banking, Business Banking and Commercial Banking, Government Banking, Warehouse Lending and LHFI Portfolio groups. Products offered through these groups include checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans and warehouse lines of credit. Other financial services available include consumer and corporate card services, customized treasury management solutions, merchant services and capital markets services such as loan syndications, 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, along with the interest income on residential mortgages within LHFI. The interest income on LHFI, excluding residential first mortgages, newly originated home equity products, 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 and other consumer 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 services loans for our LHFI portfolio 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 credit losses) and noninterest income. Noninterest expenses and provision (benefit) for income taxes, are fully allocated to each operating segment. Allocation methodologies may be subject to periodic adjustment as the internal management accounting system is revised and the business or product lines within the segments change. The following tables present financial information by business segment for the periods indicated: Three Months Ended March 31, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 104 $ 42 $ 4 $ (2 ) $ 148 Provision (benefit) for credit losses 8 (3 ) — 9 $ 14 Net interest income after provision (benefit) for credit losses 96 45 4 (11 ) 134 Net gain on loan sales — 90 — — 90 Loan fees and charges — 17 9 — 26 Loan administration (expense) income (1 ) (7 ) 36 (16 ) 12 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 16 1 — 6 23 Total noninterest income 15 107 45 (10 ) 157 Compensation and benefits 27 31 10 34 102 Commissions 1 28 — — 29 Loan processing expense 2 10 7 1 20 Other noninterest expense 44 26 19 (5 ) 84 Total noninterest expense 74 95 36 30 235 Income before indirect overhead allocations and income taxes 37 57 13 (51 ) 56 Indirect overhead allocation Income (expense) (9 ) (12 ) (5 ) 26 — Provision (benefit) for income taxes 6 9 2 (7 ) 10 Net income (loss) $ 22 $ 36 $ 6 $ (18 ) $ 46 Intersegment (expense) revenue $ (6 ) $ 1 $ 8 $ (3 ) $ — Average balances Loans held-for-sale $ — $ 5,248 $ — $ — $ 5,248 Loans with government guarantees — 811 — — $ 811 Loans held-for-investment (2) 8,898 2,895 — 30 $ 11,823 Total assets 9,387 9,817 48 4,161 $ 23,413 Deposits 10,434 — 4,777 584 $ 15,795 (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. Three Months Ended March 31, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 93 $ 33 $ 3 $ (3 ) $ 126 Provision (benefit) for credit losses 1 — — (1 ) — Net interest income after provision (benefit) for credit losses 92 33 3 (2 ) 126 Net gain on loan sales (3 ) 52 — — 49 Loan fees and charges — 10 7 — 17 Loan administration (expense) income (1 ) (4 ) 29 (13 ) 11 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 12 4 — 10 26 Total noninterest income 8 68 36 (3 ) 109 Compensation and benefits 24 24 6 33 87 Commissions — 12 — 1 13 Loan processing expense 1 5 10 1 17 Other noninterest expense 40 19 15 — 74 Total noninterest expense 66 60 31 35 191 Income before indirect overhead allocations and income taxes 34 41 8 (40 ) 44 Indirect overhead allocation Income (expense) (10 ) (10 ) (5 ) 25 — Provision (benefit) for income taxes 5 7 — (4 ) 8 Net income (loss) $ 19 $ 24 $ 3 $ (11 ) $ 36 Intersegment (expense) revenue $ — $ 3 $ 6 $ (9 ) $ — Average balances Loans held-for-sale $ — $ 3,266 $ — $ — $ 3,266 Loans with government guarantees — 455 — — $ 455 Loans held-for-investment (2) 6,234 2,901 — 29 $ 9,164 Total assets 6,589 7,612 56 4,181 $ 18,438 Deposits 9,983 — 2,528 395 $ 12,906 (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. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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: Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which alters the current method for recognizing credit losses within the reserve account. 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 current expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Effective January 1, 2020, we have adopted the requirements of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) and all related amendments using the modified retrospective method for all financial assets measured at amortized cost, net investments in leases and unfunded commitments. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a net decrease to retained earnings of $23 million as of January 1, 2020 for the cumulative effect of adopting ASC 326. The following table illustrates the impact of ASC 326: January 1, 2020 As Reported Under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption (Dollars in millions) Assets: Allowance for loan losses $ 130 $ 107 $ 23 Liabilities: Reserve for unfunded commitments $ 10 $ 3 $ 7 We adopted the following accounting standard updates (ASU) during 2020, none of which had a material impact to our financial statements: Standard Description Effective Date 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting March 12, 2020 2020-03 Codification Improvements to Financial Instruments January 1, 2020 2020-02 Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) February 6, 2020 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 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement January 1, 2020 2017-04 Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 Insignificant Accounting Standards Issued But Not Yet Adopted The following ASUs have been issued and are not expected to have a material impact on our Consolidated Financial Statements and/or significant accounting policies: Standard Description Effective Date 2019-12 Simplifying the Accounting for Income Taxes January 1, 2021 |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Credit Quality | Credit Quality We utilize an internal risk rating system which is applied to all consumer and commercial loans. Descriptions of our internal risk ratings as they relate to credit quality follow the ratings used by the U.S. bank regulatory agencies as listed below. Pass. Pass assets are not impaired nor do they have any known deficiencies that could impact the quality of the asset. Watch. Watch assets are defined as pass rated assets that exhibit elevated risk characteristics or other factors that deserve management’s close attention and increased monitoring. However, the asset does not exhibit a potential or well-defined weakness that would warrant a downgrade to criticized or adverse classification. Special mention. Assets identified as special mention possess credit deficiencies or potential weaknesses deserving management's close attention. Special mention assets have a potential weakness or pose an unwarranted financial risk that, if not corrected, could weaken the assets and increase risk in the future. Special mention assets are criticized, but do not expose an institution to sufficient risk to warrant adverse classification. Substandard . Assets identified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the full collection or liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. For home equity loans and other consumer loans, we evaluate credit quality based on the aging and status of payment activity and any other known credit characteristics that call into question full repayment of the asset. 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 BASED 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. |
Fair Value Measurement | 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. |
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: Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which alters the current method for recognizing credit losses within the reserve account. 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 current expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investment Securities | The following table presents our AFS and HTM investment securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Dollars in millions) March 31, 2020 Available-for-sale securities Agency - Commercial $ 1,269 $ 17 $ (1 ) $ 1,285 Agency - Residential 971 33 — 1,004 Municipal obligations 30 — — 30 Corporate debt obligations 67 1 (1 ) 67 Other MBS 58 1 — 59 Certificate of deposits 1 — — 1 Total available-for-sale securities (1) $ 2,396 $ 52 $ (2 ) $ 2,446 Held-to-maturity securities Agency - Commercial $ 279 $ 3 $ — $ 282 Agency - Residential 275 12 — 287 Total held-to-maturity securities (1) $ 554 $ 15 $ — $ 569 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 Certificate of Deposits 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 (1) There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10 percent of stockholders’ equity at March 31, 2020 or December 31, 2019 . |
Summary of Unrealized Loss Positions on Investment Securities - Held-to-Maturity | The following table summarizes available-for-sale and held-to-maturity securities, 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) March 31, 2020 Available-for-sale securities Agency - Commercial $ 35 4 $ — $ 91 9 $ (1 ) Municipal obligations $ — 1 $ — $ — — $ — Corporate debt obligations $ — — $ — $ 21 5 $ (1 ) Held-to-maturity securities Agency - Commercial $ 3 1 $ — $ 5 1 $ — 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 $ — |
Summary of Unrealized Loss Positions on Investment Securities - Available-for-Sale | The following table summarizes available-for-sale and held-to-maturity securities, 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) March 31, 2020 Available-for-sale securities Agency - Commercial $ 35 4 $ — $ 91 9 $ (1 ) Municipal obligations $ — 1 $ — $ — — $ — Corporate debt obligations $ — — $ — $ 21 5 $ (1 ) Held-to-maturity securities Agency - Commercial $ 3 1 $ — $ 5 1 $ — 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 $ — |
Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | The following table 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) March 31, 2020 Due in one year or less $ 3 $ 3 2.04 % $ — $ — — % Due after one year through five years 11 11 2.68 % 9 9 2.49 % Due after five years through 10 years 102 104 4.03 % 8 9 2.28 % Due after 10 years 2,280 2,328 2.42 % 537 551 2.44 % Total $ 2,396 $ 2,446 $ 554 $ 569 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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: March 31, 2020 December 31, 2019 (Dollars in millions) Consumer loans Residential first mortgage $ 2,964 $ 3,154 Home equity 1,028 1,024 Other 858 729 Total consumer loans 4,850 4,907 Commercial loans Commercial real estate 3,092 2,828 Commercial and industrial 1,880 1,634 Warehouse lending 3,973 2,760 Total commercial loans 8,945 7,222 Total loans held-for-investment $ 13,795 $ 12,129 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: Three Months Ended March 31, 2020 2019 (Dollars in millions) Loans Sold (1) Performing loans $ 38 $ 102 Total loans sold $ 38 $ 102 Net gain associated with loan sales (2) $ — $ 2 Loans Purchased Home equity $ — $ 49 Other consumer 63 51 Total loans purchased $ 63 $ 100 Premium associated with loans purchased $ — $ 3 (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 Statements of Operations. |
Changes in ALLL and Method of Evaluation by Class of Loan | The following table presents changes in the allowance for loan losses, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) Three Months Ended March 31, 2020 Beginning balance, prior to adoption of ASC 326 $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 Impact of adopting ASC 326 25 12 10 (14 ) (6 ) (4 ) 23 Provision (benefit) — (2 ) — 4 2 — 4 Charge-offs (1 ) (1 ) (1 ) — — — (3 ) Recoveries — — 1 — — — 1 Ending allowance balance $ 46 $ 23 $ 16 $ 28 $ 18 $ 1 $ 132 Three Months Ended March 31, 2019 Beginning balance $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Provision (benefit) (2 ) — 2 (12 ) 12 — — Charge-offs (1 ) — (1 ) — — — (2 ) Recoveries — 1 — — — — 1 Ending allowance balance $ 35 $ 16 $ 4 $ 36 $ 30 $ 6 $ 127 (1) Includes loans with government guarantees. |
Schedule of amortized cost basis of collateral-dependent loans | The following table presents the amortized cost basis of loans for which the reserve is established based on collateral value, by class of loan: Balance at March 31, 2020 Real Estate Consumer loans Residential first mortgage $ 44 Home equity 20 Other 2 Total $ 66 |
Aging Analysis of Past Due and Current Loans | The following table sets forth the LHFI aging analysis of past due and current loans: 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due (1) Total Past Due Current Total LHFI (Dollars in millions) March 31, 2020 Consumer loans Residential first mortgage $ 8 $ 3 $ 24 $ 35 $ 2,929 $ 2,964 Home equity 2 1 3 6 1,022 1,028 Other 4 1 2 7 851 858 Total consumer loans 14 5 29 48 4,802 4,850 Commercial loans Commercial real estate 6 — — 6 3,086 3,092 Commercial and industrial (1) 1 — — 1 1,879 1,880 Warehouse lending — — — — 3,973 3,973 Total commercial loans 7 — — 7 8,938 8,945 Total loans (2) $ 21 $ 5 $ 29 $ 55 $ 13,740 $ 13,795 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 (1) Includes less than 90 day past due performing loans which are deemed nonaccrual. Interest is not being accrued on these loans. (2) Includes $4 million of past due loans accounted for under the fair value option for both March 31, 2020 and December 31, 2019 , 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) March 31, 2020 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home equity 17 2 19 Total TDRs (1)(2) $ 37 $ 10 $ 47 December 31, 2019 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home Equity 18 2 20 Total TDRs (1)(2) $ 38 $ 10 $ 48 (1) Allowance for loan losses on TDR loans totaled $5 million and $8 million at March 31, 2020 and December 31, 2019, respectively. (2) Includes $2 million of TDR loans accounted for under the fair value option at March 31, 2020 and December 31, 2019 . 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) (Dollars in millions) Three Months Ended March 31, 2020 Residential first mortgages 5 $ 1 $ 1 Home equity (2)(3) 2 — — Consumer 1 — — Total TDR loans 8 $ 1 $ 1 Three Months Ended March 31, 2019 Residential first mortgages 2 $ — $ — Home equity (2)(3) 2 — — Total TDR loans 4 $ — $ — (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 the fair value option. |
Loan Credit Quality Indicators | The following table presents the amortized cost in residential and consumer loans based on payment activity: Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage Pass $ 85 $ 775 $ 377 $ 482 $ 416 $ 658 $ 116 $ 5 $ 2,914 Watch — 1 1 1 1 21 1 — 26 Substandard — 2 5 3 — 14 — — 24 Home Equity — Pass 4 47 23 11 3 17 890 12 1,007 Watch — — — — — 15 2 — 17 Substandard — — — — — 2 1 1 4 Other Consumer — Pass 68 391 197 6 3 8 179 3 855 Watch — — 1 — — — — — 1 Substandard — — 1 — — — — 1 2 Total consumer loans $ 157 $ 1,216 $ 605 $ 503 $ 423 $ 735 $ 1,189 $ 22 $ 4,850 The following table presents the amortized cost in residential and consumer loans based on credit scores: FICO Band Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage >750 $ 40 $ 412 $ 202 $ 337 $ 316 $ 399 $ 68 $ 2 $ 1,776 700-750 35 257 146 132 92 192 35 1 890 <700 9 109 34 17 8 105 14 2 298 Home Equity >750 1 15 9 4 1 10 400 3 443 700-750 2 18 8 5 1 14 348 7 403 <700 2 13 7 2 1 10 144 3 182 Other Consumer >750 46 250 104 3 2 3 93 1 502 700-750 20 128 75 2 1 1 59 1 287 <700 2 14 20 1 1 1 28 2 69 Total consumer loans $ 157 $ 1,216 $ 605 $ 503 $ 423 $ 735 $ 1,189 $ 22 $ 4,850 Loan-to-value ratios primarily impact the allowance on mortgages within the consumer loan portfolio. The following table presents the amortized cost in residential first mortgages and home equity based on loan-to-value ratios: LTV Band Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans Residential first mortgage >90 $ 22 $ 321 $ 189 $ 49 $ 4 $ 23 $ — $ — $ 608 71-90 37 275 112 170 110 326 — — 1,030 55-70 18 109 41 146 158 209 — — 681 <55 8 73 40 121 144 137 117 5 645 Home Equity >90 — — — 1 1 15 — — 17 71-90 3 35 17 8 2 13 478 5 561 <=70 1 11 6 2 1 7 414 8 450 Total $ 89 $ 824 $ 405 $ 497 $ 420 $ 730 $ 1,009 $ 18 $ 3,992 Based on the most recent analysis performed, the amortized cost basis, by risk category for each class of loans within the commercial portfolio is as follows: Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total Amortized Cost Basis by Origination Year As of March 31, 2020 2020 2019 2018 2017 2016 Prior Commercial Loans Commercial real estate Pass $ 166 $ 999 $ 519 $ 546 $ 355 $ 278 $ (1 ) $ — $ 2,862 Watch 20 13 71 42 38 34 — — 218 Special mention — — 7 — — — — — 7 Substandard — — — 5 — — — — 5 Commercial and industrial Pass 236 614 277 332 184 114 24 — 1,781 Watch 1 6 6 42 — 1 1 — 57 Special mention — 11 18 9 — — — — 38 Substandard — — — 4 — — — — 4 Warehouse Pass — — — — — — 3,720 — 3,720 Watch — — — — — — 222 — 222 Special mention — — — — — — 31 — 31 Substandard — — — — — — — — — Total commercial loans $ 423 $ 1,643 $ 898 $ 980 $ 577 $ 427 $ 3,997 $ — $ 8,945 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Changes in the Fair Value of Residential First Mortgage MSRs | Changes in the fair value of residential first mortgage MSRs were as follows: Three Months Ended March 31, 2020 2019 (Dollars in millions) Balance at beginning of period $ 291 $ 290 Additions from loans sold with servicing retained 40 67 Reductions from sales (36 ) (45 ) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (22 ) (11 ) Changes in estimates of fair value due to interest rate risk (1) (2) (50 ) (23 ) Fair value of MSRs at end of period $ 223 $ 278 (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 which we manage through the use of derivatives. |
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 certain significant assumptions used in valuing these assets: March 31, 2020 December 31, 2019 Fair value Fair value Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.56 % $ 220 $ 217 5.34 % $ 284 $ 280 Constant prepayment rate 12.04 % 206 191 10.59 % 271 257 Weighted average cost to service per loan $ 84.59 221 218 $ 84.41 285 282 |
Summary of Income and Fees | The following table summarizes income and fees associated with owned mortgage servicing rights: Three Months Ended March 31, 2020 2019 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 21 $ 19 Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (22 ) (11 ) Changes in fair value due to interest rate risk (50 ) (23 ) Gain on MSR derivatives (2) 58 22 Net transaction costs (1 ) (1 ) Total return (loss) included in net return on mortgage servicing rights $ 6 $ 6 (1) Servicing fees are recorded on an 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: Three Months Ended March 31, 2020 2019 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 31 $ 24 Charges on subserviced custodial balances (2) (16 ) (12 ) Other servicing charges (3 ) (1 ) Total income on mortgage loans subserviced, included in loan administration $ 12 $ 11 (1) Servicing fees are recorded on an accrual basis. 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) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Amount, Estimated Fair Value and Maturity and Net Gain (Loss) Recognized on Designated Instruments | The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: March 31, 2020 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in cash flow hedge relationships: Assets Interest rate swaps on custodial deposits $ 800 $ 2 2026-2027 Derivatives in fair value hedge relationships: Assets Interest rate swaps on AFS securities 350 — 2024-2025 Total derivative assets $ 1,150 $ 2 Liabilities Interest rate swaps on AFS securities 100 — 2022 Total derivative liabilities $ 100 $ — Derivatives not designated as hedging instruments: Assets Futures $ 1,103 $ 1 2020-2023 Mortgage-backed securities forwards 232 39 2020 Rate lock commitments 8,318 169 2020 Interest rate swaps 878 66 2020-2030 Total derivative assets $ 10,531 $ 275 Liabilities Mortgage-backed securities forwards 9,548 278 2020 Rate lock commitments 27 — 2020 Interest rate swaps and swaptions 1,505 10 2020-2050 Total derivative liabilities $ 11,080 $ 288 (1) Variation margin pledged to or received from a Central Counterparty Clearing House 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, 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 day's 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. |
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 Statements of Financial Condition Net Amount Presented in the Statements of Financial Condition Gross Amounts Not Offset in the Statements of Financial Condition Gross Amount Financial Instruments Cash Collateral (Dollars in millions) March 31, 2020 Derivatives designated as hedging instruments: Assets Interest rate swaps on AFS securities $ — $ — $ — $ — $ 6 Interest rate swaps on custodial deposits 2 — 2 — 14 Total derivative assets $ 2 $ — $ 2 $ — $ 20 Liabilities Interest rate swaps on AFS securities $ — $ — $ — $ — $ 2 Total derivative liabilities $ — $ — $ — $ — $ 2 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 39 $ — $ 39 $ — $ — Interest rate swaps 66 — 66 — 3 Futures 1 — 1 — — Total derivative assets $ 106 $ — $ 106 $ — $ 3 Liabilities Mortgage-backed securities forwards $ 278 $ — $ 278 $ — $ 269 Interest rate swaps and swaptions (1) 10 — 10 — 31 Total derivative liabilities $ 288 $ — $ 288 $ — $ 300 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 (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day's fair value of open positions, is considered settlement of the derivative position for accounting purposes. |
Net Gain (Loss) Recognized in Income on Derivative Instruments | The following table presents net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended March 31, 2020 2019 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain (Loss) Futures Net loss on mortgage servicing rights $ 1 $ — Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights 38 13 Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 19 9 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (100 ) 8 Forward commitments Other noninterest income — 1 Interest rate swaps (1) Other noninterest income — 1 Total derivative (loss) gain $ (42 ) $ 32 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Breakdown of FHLB Advances Outstanding | The following is a breakdown of our FHLB advances outstanding: March 31, 2020 December 31, 2019 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 5,336 0.24 % $ 3,695 1.61 % Other short-term borrowings 505 0.20 % 470 1.64 % Total short-term Federal Home Loan Bank advances and other borrowings 5,841 4,165 Long-term fixed rate advances (1) 1,000 1.19 % 650 1.45 % Total long-term Federal Home Loan Bank advances 1,000 650 Total Federal Home Loan Bank advances and other borrowings $ 6,841 $ 4,815 (1) Includes the current portion of fixed rate advances of $0 million at both March 31, 2020 and December 31, 2019 . |
Detailed Information on FHLB Advances and Other Borrowings | The following table contains detailed information on our FHLB advances and other borrowings: Three Months Ended March 31, 2020 2019 (Dollars in millions) Maximum outstanding at any month end $ 6,841 $ 3,391 Average outstanding balance 4,359 2,878 Average remaining borrowing capacity 4,977 3,314 Weighted average interest rate 1.32 % 2.45 % |
Maturity Dates of FHLB Advances and Other Borrowings | The following table outlines the maturity dates of our FHLB advances and other borrowings: March 31, 2020 (Dollars in millions) 2020 $ 5,841 2021 — 2022 — 2023 500 Thereafter 500 Total $ 6,841 |
Long-Term Debt, Net of Debt Issuance Costs | The following table presents long-term debt, net of debt issuance costs: March 31, 2020 December 31, 2019 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 246 6.125 % $ 249 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus: 3.25%, matures 2032 $ 26 4.48 % $ 26 5.20 % 3.25%, matures 2033 26 5.08 % 26 5.24 % 3.25%, matures 2033 26 4.62 % 26 5.21 % 2.00%, matures 2035 26 3.83 % 26 3.99 % 2.00%, matures 2035 26 3.83 % 26 3.99 % 1.75%, matures 2035 51 2.49 % 51 3.64 % 1.50%, matures 2035 25 3.33 % 25 3.49 % 1.45%, matures 2037 25 2.19 % 25 3.34 % 2.50%, matures 2037 16 3.24 % 16 4.39 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 493 $ 496 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components in accumulated other comprehensive income (loss): Three Months Ended March 31, 2020 2019 (Dollars in millions) Investment Securities Beginning balance $ 1 $ (47 ) Unrealized gain 45 21 Less: Tax provision 11 5 Net unrealized gain 34 16 Reclassifications out of AOCI (1) — — Less: Tax provision — — Net unrealized gain reclassified out of AOCI — — Other comprehensive income, net of tax 34 16 Ending balance $ 35 $ (31 ) Cash Flow Hedges Beginning balance $ — $ — Unrealized gain (loss) (5 ) — Less: Tax provision (benefit) (1 ) — Net unrealized gain (loss) (4 ) — Reclassifications out of AOCI (1) — — Less: Tax provision — — Net unrealized gain (loss) reclassified out of AOCI — — Other comprehensive income (loss), net of tax (4 ) — Ending balance $ (4 ) $ — (1) Reclassifications are reported in noninterest income on the Consolidated Statements of Operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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: Three Months Ended March 31, 2020 2019 (Dollars in millions, except share data) Net income applicable to common stockholders $ 46 $ 36 Weighted Average Shares Weighted average common shares outstanding 56,655,865 56,897,799 Effect of dilutive securities Stock-based awards 534,058 692,473 Weighted average diluted common shares $ 57,189,923 $ 57,590,272 Earnings per common share Basic earnings per common share $ 0.80 $ 0.64 Effect of dilutive securities Stock-based awards — (0.01 ) Diluted earnings per common share $ 0.80 $ 0.63 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Activity | The following table summarizes restricted stock and restricted stock units activity: Three Months Ended March 31, 2020 Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,399,127 $ 28.72 Granted 58,888 26.03 Vested (45,904 ) 29.47 Canceled and forfeited (30,189 ) 33.86 Non-vested balance at end of period 1,381,922 $ 28.47 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Tax and Effective Tax Provision Rate | The following table presents our provision for income tax and effective tax provision rate: Three Months Ended March 31, 2020 2019 (Dollars in millions) Provision for income taxes $ 10 $ 8 Effective tax provision rate 18.5 % 18.4 % |
Legal Proceedings, Contingenc_2
Legal Proceedings, Contingencies and Commitments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Amount of Significant Commitments | The following table is a summary of the contractual amount of significant commitments: March 31, 2020 December 31, 2019 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 8,345 $ 4,099 Warehouse loan commitments 2,258 1,944 Commercial and industrial commitments 741 1,107 Other commercial commitments 1,817 2,015 HELOC commitments 580 558 Other consumer commitments 272 175 Standby and commercial letters of credit 94 82 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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) March 31, 2020 Tier 1 capital (to adjusted avg. total assets) $ 1,879 8.09 % $ 928 4.0 % $ 1,161 5.0 % Common equity Tier 1 capital (to RWA) 1,639 9.17 % 804 4.5 % 1,161 6.5 % Tier 1 capital (to RWA) 1,879 10.52 % 1,072 6.0 % 1,429 8.0 % Total capital (to RWA) 1,997 11.18 % 1,429 8.0 % 1,786 10.0 % 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 % $ 1271 8.0 % 1,589 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) March 31, 2020 Tier 1 capital (to adjusted avg. total assets) $ 1,900 8.19 % $ 928 4.0 % $ 1160 5.0 % Common equity Tier 1 capital (to RWA) 1,900 10.64 % 804 4.5 % 1,161 6.5 % Tier 1 capital (to RWA) 1,900 10.64 % 1,071 6.0 % 1,429 8.0 % Total capital (to RWA) 2,019 11.30 % 1,429 8.0 % 1,786 10.0 % 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 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 Statement of Financial Condition and by level in the valuation hierarchy. March 31, 2020 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Securitized HFS loans not sold Agency - Residential $ — $ 2,058 $ — $ 2,058 Investment securities available-for-sale Agency - Commercial $ — $ 1,285 $ — $ 1,285 Agency - Residential — 1,004 — 1,004 Municipal obligations — 30 — 30 Corporate debt obligations — 67 — 67 Other MBS — 59 — 59 Certificate of deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 4,365 — 4,365 Commercial Loan — — — — Loans held-for-investment Residential first mortgage loans — 10 — 10 Home equity — — 2 2 Mortgage servicing rights — — 223 223 Derivative assets Rate lock commitments (fallout-adjusted) — — 169 169 Futures — 1 — 1 Mortgage-backed securities forwards — 39 — 39 Interest rate swaps and swaptions — 68 — 68 Total assets at fair value $ — $ 8,987 $ 394 $ 9,381 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ — $ — Futures — — — — Mortgage backed securities forwards — (278 ) — (278 ) Interest rate swaps — (10 ) — (10 ) DOJ Liability — — (35 ) (35 ) Contingent consideration — — (16 ) (16 ) Total liabilities at fair value $ — $ (288 ) $ (51 ) $ (339 ) 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 Deposit — 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 — (8 ) — (8 ) DOJ litigation settlement — — (35 ) (35 ) Contingent consideration — — (10 ) (10 ) Total liabilities at fair value $ — $ (17 ) $ (46 ) $ (63 ) |
Roll Forward of Financial Instruments Classified as Level 3 | 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 Beginning of Period Total Gains (Losses) Recorded in Earnings (1) Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Period (Dollars in millions) Three Months Ended March 31, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 291 (72 ) 40 (36 ) — — 223 Rate lock commitments (net) (2)(3) 34 105 164 — — (134 ) 169 Totals $ 327 $ 33 $ 204 $ (36 ) $ — $ (134 ) $ 394 Liabilities DOJ Liability $ (35 ) $ — $ — $ — $ — $ — $ (35 ) Contingent consideration (10 ) (6 ) — — — — (16 ) Totals $ (45 ) $ (6 ) $ — $ — $ — $ — $ (51 ) Three Months Ended March 31, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 290 (34 ) 67 (45 ) — — 278 Rate lock commitments (net) (2)(3) 20 25 50 — — (58 ) 37 Totals $ 312 $ (9 ) $ 117 $ (45 ) $ — $ (58 ) $ 317 Liabilities DOJ Liability $ (60 ) $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (6 ) — — — — — (6 ) Totals $ (66 ) $ — $ — $ — $ — $ — $ (66 ) (1) There were no unrealized gains (losses) recorded in OCI during the three months ended March 31, 2020 and 2019 . (2) 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. (3) 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 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) March 31, 2020 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) (1) Mortgage servicing rights $ 223 Discounted cash flows Option adjusted spread 3.6% - 19.9% (5.6%) (1) Rate lock commitments (net) $ 169 Consensus pricing Origination pull-through rate 80.0% - 87.2% (81.2%) (1) Liabilities DOJ Liability $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (16 ) Discounted cash flows See description below See description below (2) 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 Liability $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (10 ) 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) March 31, 2020 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 15 — 15 (3 ) Repossessed assets (3) 10 — 10 (4 ) Totals $ 31 $ 6 $ 25 $ (8 ) 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 ) (1) The fair values are determined at various dates during the three months ended March 31, 2020 and the year ended December 31, 2019 , 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. |
Quantitative Information about Nonrecurring Level 3 Fair Value Financial Instruments | The following table presents 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) March 31, 2020 Impaired loans held-for-investment Loans held-for-investment $ 15 Fair value of collateral Loss severity discount 0% - 40% (6.3%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (20.1%) (1) December 31, 2019 Impaired loans held-for-investment Loans held-for-investment $ 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) (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: March 31, 2020 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 342 $ 342 $ 342 $ — $ — Securitized HFS loans not sold 2,058 $ 2,058 — 2,058 — Investment securities available-for-sale 2,446 2,446 — 2,446 — Investment securities held-to-maturity 554 569 — 569 — Loans held-for-sale 4,389 4,390 — 4,390 — Loans held-for-investment 13,795 13,801 — 10 13,791 Loans with government guarantees 814 788 — 788 — Mortgage servicing rights 223 223 — — 223 Federal Home Loan Bank stock 306 306 — 306 — Bank owned life insurance 351 351 — 351 — Repossessed assets 10 10 — — 10 Other assets, foreclosure claims 40 40 — 40 — Derivative financial instruments, assets 277 277 — 108 169 Liabilities Retail deposits Demand deposits and savings accounts $ (7,007 ) $ (6,570 ) $ — $ (6,570 ) $ — Certificates of deposit (2,138 ) (2,161 ) — (2,161 ) — Wholesale deposits (561 ) (575 ) — (575 ) — Government deposits (1,164 ) (1,160 ) — (1,160 ) — Custodial deposits (5,182 ) (5,165 ) — (5,165 ) — Federal Home Loan Bank advances (6,841 ) (6,870 ) — (6,870 ) — Long-term debt (493 ) (452 ) — (452 ) — DOJ Liability (35 ) (35 ) — — (35 ) Contingent consideration (16 ) (16 ) — — (16 ) Derivative financial instruments, liabilities (288 ) (288 ) — (288 ) — 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, assets 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 Liability (35 ) (35 ) — — (35 ) Contingent consideration (10 ) (10 ) — — (10 ) Derivative financial instruments, liabilities (18 ) (44 ) — (43 ) (1 ) |
Changes in Fair Value Included in Earnings | The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected: Three Months Ended March 31, 2020 2019 (Dollars in millions) Assets Loans held-for-sale Net gain (loss) on loan sales $ 234 $ 79 |
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: March 31, 2020 December 31, 2019 UPB Fair Value Fair Value Over / (Under) UPB UPB Fair Value Fair Value Over / (Under) UPB (Dollars in millions) Assets Nonaccrual loans Loans held-for-sale $ 4 $ 3 $ (1 ) $ 3 $ 3 $ — Loans held-for-investment 5 4 (1 ) 5 4 (1 ) Total nonaccrual loans $ 9 $ 7 $ (2 ) $ 8 $ 7 $ (1 ) Other performing loans Loans held-for-sale $ 4,151 $ 4,362 $ 211 $ 5,057 $ 5,216 $ 159 Loans held-for-investment 8 8 — 8 8 — Total other performing loans $ 4,159 $ 4,370 $ 211 $ 5,065 $ 5,224 $ 159 Total loans Loans held-for-sale $ 4,155 $ 4,365 $ 210 $ 5,060 $ 5,219 $ 159 Loans held-for-investment 13 12 (1 ) 13 12 (1 ) Total loans $ 4,168 $ 4,377 $ 209 $ 5,073 $ 5,231 $ 158 Liabilities DOJ Liability (1) $ (118 ) $ (35 ) $ 83 $ (118 ) $ (35 ) $ 83 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 15 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Financial Information by Business Segment | The following tables present financial information by business segment for the periods indicated: Three Months Ended March 31, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 104 $ 42 $ 4 $ (2 ) $ 148 Provision (benefit) for credit losses 8 (3 ) — 9 $ 14 Net interest income after provision (benefit) for credit losses 96 45 4 (11 ) 134 Net gain on loan sales — 90 — — 90 Loan fees and charges — 17 9 — 26 Loan administration (expense) income (1 ) (7 ) 36 (16 ) 12 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 16 1 — 6 23 Total noninterest income 15 107 45 (10 ) 157 Compensation and benefits 27 31 10 34 102 Commissions 1 28 — — 29 Loan processing expense 2 10 7 1 20 Other noninterest expense 44 26 19 (5 ) 84 Total noninterest expense 74 95 36 30 235 Income before indirect overhead allocations and income taxes 37 57 13 (51 ) 56 Indirect overhead allocation Income (expense) (9 ) (12 ) (5 ) 26 — Provision (benefit) for income taxes 6 9 2 (7 ) 10 Net income (loss) $ 22 $ 36 $ 6 $ (18 ) $ 46 Intersegment (expense) revenue $ (6 ) $ 1 $ 8 $ (3 ) $ — Average balances Loans held-for-sale $ — $ 5,248 $ — $ — $ 5,248 Loans with government guarantees — 811 — — $ 811 Loans held-for-investment (2) 8,898 2,895 — 30 $ 11,823 Total assets 9,387 9,817 48 4,161 $ 23,413 Deposits 10,434 — 4,777 584 $ 15,795 (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. Three Months Ended March 31, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 93 $ 33 $ 3 $ (3 ) $ 126 Provision (benefit) for credit losses 1 — — (1 ) — Net interest income after provision (benefit) for credit losses 92 33 3 (2 ) 126 Net gain on loan sales (3 ) 52 — — 49 Loan fees and charges — 10 7 — 17 Loan administration (expense) income (1 ) (4 ) 29 (13 ) 11 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 12 4 — 10 26 Total noninterest income 8 68 36 (3 ) 109 Compensation and benefits 24 24 6 33 87 Commissions — 12 — 1 13 Loan processing expense 1 5 10 1 17 Other noninterest expense 40 19 15 — 74 Total noninterest expense 66 60 31 35 191 Income before indirect overhead allocations and income taxes 34 41 8 (40 ) 44 Indirect overhead allocation Income (expense) (10 ) (10 ) (5 ) 25 — Provision (benefit) for income taxes 5 7 — (4 ) 8 Net income (loss) $ 19 $ 24 $ 3 $ (11 ) $ 36 Intersegment (expense) revenue $ — $ 3 $ 6 $ (9 ) $ — Average balances Loans held-for-sale $ — $ 3,266 $ — $ — $ 3,266 Loans with government guarantees — 455 — — $ 455 Loans held-for-investment (2) 6,234 2,901 — 29 $ 9,164 Total assets 6,589 7,612 56 4,181 $ 18,438 Deposits 9,983 — 2,528 395 $ 12,906 (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. |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Standards Adopted and Accounting Standards Issued and Not Expected to Have a Material Impact | We adopted the following accounting standard updates (ASU) during 2020, none of which had a material impact to our financial statements: Standard Description Effective Date 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting March 12, 2020 2020-03 Codification Improvements to Financial Instruments January 1, 2020 2020-02 Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) February 6, 2020 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 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement January 1, 2020 2017-04 Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 The following table illustrates the impact of ASC 326: January 1, 2020 As Reported Under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption (Dollars in millions) Assets: Allowance for loan losses $ 130 $ 107 $ 23 Liabilities: Reserve for unfunded commitments $ 10 $ 3 $ 7 Standard Description Effective Date 2019-12 Simplifying the Accounting for Income Taxes January 1, 2021 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Securitized HFS loans not sold | $ 0 | $ 2,058,000,000 |
Other than temporary impairment | 0 | |
Other assets | 930,000,000 | $ 1,430,000,000 |
Federal Government | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Percentage of total securities | 95.00% | |
Accrued interest receivable on investment securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Other assets | $ 6,000,000 | $ 7,000,000 |
Investment Securities - Summary
Investment Securities - Summary of Investment Securities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale securities | ||
Amortized Cost | $ 2,396 | $ 2,115 |
Gross Unrealized Gains | 52 | 8 |
Gross Unrealized Losses | 2 | 7 |
Fair Value | 2,446 | 2,116 |
Held-to-maturity securities | ||
Amortized Cost | 554 | 598 |
Gross Unrealized Gains | 15 | 3 |
Gross Unrealized Losses | 0 | (2) |
Fair Value | 569 | 599 |
Agency - Commercial | ||
Available-for-sale securities | ||
Amortized Cost | 1,269 | 948 |
Gross Unrealized Gains | 17 | 2 |
Gross Unrealized Losses | 1 | 3 |
Fair Value | 1,285 | 947 |
Held-to-maturity securities | ||
Amortized Cost | 279 | 306 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 282 | 305 |
Agency - Residential | ||
Available-for-sale securities | ||
Amortized Cost | 971 | 1,015 |
Gross Unrealized Gains | 33 | 4 |
Gross Unrealized Losses | 0 | 4 |
Fair Value | 1,004 | 1,015 |
Held-to-maturity securities | ||
Amortized Cost | 275 | 292 |
Gross Unrealized Gains | 12 | 3 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 287 | 294 |
Municipal obligations | ||
Available-for-sale securities | ||
Amortized Cost | 30 | 31 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 30 | 31 |
Corporate debt obligations | ||
Available-for-sale securities | ||
Amortized Cost | 67 | 76 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | 1 | 0 |
Fair Value | 67 | 77 |
Other MBS | ||
Available-for-sale securities | ||
Amortized Cost | 58 | 44 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 59 | 45 |
Certificate of deposits | ||
Available-for-sale securities | ||
Amortized Cost | 1 | 1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 1 | $ 1 |
Investment Securities - Availab
Investment Securities - Available-for-Sale Securities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | |||
Purchase of AFS securities | $ 350,000,000 | $ 16,000,000 | |
AFS securities sold | 0 | ||
Collateral pledged | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment securities pledged | 828,000,000 | $ 874,000,000 | |
Flagstar Bancorp, Inc. mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Passive interest in private MBS | $ 18,000,000 | $ 0 |
Investment Securities - Held-to
Investment Securities - Held-to-Maturity Securities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Schedule of Held-to-maturity Securities [Line Items] | |||
Purchase of HTM securities | $ 0 | $ 0 | |
Sale of HTM securities | 0 | $ 0 | |
Collateral pledged | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Debt securities, available-for-sale, restricted | $ 828,000,000 | $ 874,000,000 |
Investment Securities - Summa_2
Investment Securities - Summary of Unrealized Loss Positions on Investment Securities (Details) $ in Millions | Mar. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Agency - Commercial | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 35 | $ 148 |
Unrealized Loss Position with Duration Under 12 Months | $ 91 | $ 303 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 4,000,000 | 17,000,000 |
Unrealized Loss Position with Duration Under 12 Months | security | 9,000,000 | 19,000,000 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ (3) |
Unrealized Loss Position with Duration Under 12 Months | (1) | 0 |
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 3 | 148 |
Unrealized Loss Position with Duration Under 12 Months | $ 5 | $ 85 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 1,000,000 | 13,000,000 |
Unrealized Loss Position with Duration Under 12 Months | security | 1,000,000 | 6,000,000 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ (1) |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Agency - Residential | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 266 | |
Unrealized Loss Position with Duration Under 12 Months | $ 148 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 26,000,000 | |
Unrealized Loss Position with Duration Under 12 Months | security | 14,000,000 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (3) | |
Unrealized Loss Position with Duration Under 12 Months | (1) | |
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 35 | |
Unrealized Loss Position with Duration Under 12 Months | $ 38 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 7,000,000 | |
Unrealized Loss Position with Duration Under 12 Months | security | 10,000,000 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (1) | |
Unrealized Loss Position with Duration Under 12 Months | 0 | |
Corporate debt obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | |
Unrealized Loss Position with Duration Under 12 Months | $ 21 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 0 | |
Unrealized Loss Position with Duration Under 12 Months | security | 5,000,000 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | |
Unrealized Loss Position with Duration Under 12 Months | (1) | |
Municipal obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | 8 |
Unrealized Loss Position with Duration Under 12 Months | $ 0 | $ 0 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 1,000,000 | 3,000,000 |
Unrealized Loss Position with Duration Under 12 Months | security | 0 | 0 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ 0 |
Unrealized Loss Position with Duration Under 12 Months | $ 0 | $ 0 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Investment Securities Available-for-Sale, Amortized Cost | ||
Due in one year or less | $ 3 | |
Due after one year through five years | 11 | |
Due after five years through 10 years | 102 | |
Due after 10 years | 2,280 | |
Amortized Cost | 2,396 | $ 2,115 |
Investment Securities Available-for-Sale, Estimated Fair Value | ||
Due in one year or less | 3 | |
Due after one year through five years | 11 | |
Due after five years through 10 years | 104 | |
Due after 10 years | 2,328 | |
Fair Value | $ 2,446 | 2,116 |
Investment Securities Available-for-Sale, Weighted-Average Yield | ||
Due in one year or less | 2.04% | |
Due after one year through five years | 2.68% | |
Due after five years through 10 years | 4.03% | |
Due after 10 years | 2.42% | |
Investment Securities Held-to-maturity, Amortized cost | ||
Due in one year or less | $ 0 | |
Due after one year through five years | 9 | |
Due after five years through 10 years | 8 | |
Due after 10 years | 537 | |
Amortized Cost | 554 | 598 |
Investment Securities Held-to-maturity, Estimated Fair Value | ||
Due in one year or less | 0 | |
Due after one year through five years | 9 | |
Due after five years through 10 years | 9 | |
Due after 10 years | 551 | |
Fair Value | $ 569 | $ 599 |
Investment Securities Held-to-maturity, Weighted-Average Yield | ||
Due in one year or less | 0.00% | |
Due after one year through five years | 2.49% | |
Due after five years through 10 years | 2.28% | |
Due after 10 years | 2.44% |
Loans Held-for-Sale (Details)
Loans Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-sale | $ 4,389 | $ 5,258 | |
Net gain on loan sales | 90 | $ 49 | |
Loans Held-for-Sale | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Net gain on loan sales | 89 | $ 47 | |
LHFS Recorded at Lower of Cost or Fair Value | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-sale | $ 24 | $ 39 |
Loans Held-for-Investment - Sum
Loans Held-for-Investment - Summary of Loans Held-for-Investment (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 13,795 | $ 12,129 |
Consumer loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 4,850 | 4,907 |
Consumer loans | Residential first mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 2,964 | 3,154 |
Consumer loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 1,028 | 1,024 |
Consumer loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 858 | 729 |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 8,945 | 7,222 |
Commercial loans | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 3,092 | 2,828 |
Commercial loans | Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | 1,880 | 1,634 |
Commercial loans | Warehouse lending | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 3,973 | $ 2,760 |
Loans Held-for-Investment - S_2
Loans Held-for-Investment - Summary of the UPB of Loan Sales and Purchases in the Loans Held-for-Investment Portfolio (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans sold | $ 38 | $ 102 |
Net gain associated with loan sales | 0 | 2 |
Total loans purchased | 63 | 100 |
Premium associated with loans purchased | 0 | 3 |
Consumer loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans purchased | 0 | 49 |
Consumer loans | Other Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans purchased | 63 | 51 |
Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans sold | $ 38 | $ 102 |
Loans Held-for-Investment - Nar
Loans Held-for-Investment - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020USD ($)loan | Mar. 31, 2019USD ($)loan | Dec. 31, 2020 | Dec. 31, 2019USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2018USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Other assets | $ 1,430,000,000 | $ 930,000,000 | |||||
Loans pledged as collateral | $ 8,300,000,000 | 9,100,000,000 | |||||
Allowance for credit loss, forecast period | 2 years | ||||||
Allowance for loan losses | $ 132,000,000 | $ 127,000,000 | 107,000,000 | $ 107,000,000 | $ 128,000,000 | ||
Allowance for credit loss, writeoff | 3,000,000 | 2,000,000 | |||||
Accrued interest on nonaccrual loans (less than) | 1,000,000 | 1,000,000 | |||||
Loans 90 days past due and still accruing interest | 0 | 0 | |||||
Other liabilities | 1,577,000,000 | 1,021,000,000 | |||||
Increase from modification | $ 1,000,000 | $ 1,000,000 | |||||
Residential first mortgage loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Number of loans modified in previous 12 months that have defaulted | loan | 1 | 0 | |||||
COVID-19 pandemic | Forecast | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
GDP contraction (in percentage) | 18.00% | ||||||
Decrease in HPI (in percentage) | 3.00% | ||||||
Increase in unemployment (in percentage) | 9.00% | ||||||
Unemployment rate (in percentage) | 7.00% | ||||||
Unfunded commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Other liabilities | $ 20,000,000 | $ 3,000,000 | |||||
Accrued interest receivable on loans held-for-investment | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Other assets | $ 36,100,000 | $ 36,900,000 |
Loans Held-for-Investment - Cha
Loans Held-for-Investment - Changes in ALLL by Class of Loan (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | $ 107 | $ 128 | |
Impact of adopting ASC 326 | 132 | 127 | $ 107 |
Provision (benefit) | 4 | 0 | |
Charge-offs | (3) | (2) | |
Recoveries | 1 | 1 | |
Ending allowance balance | 132 | 127 | |
Consumer Loans | Residential first mortgage loans | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 22 | 38 | |
Impact of adopting ASC 326 | 46 | 35 | |
Provision (benefit) | 0 | (2) | |
Charge-offs | (1) | (1) | |
Recoveries | 0 | 0 | |
Ending allowance balance | 46 | 35 | |
Consumer Loans | Home equity | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 14 | 15 | |
Impact of adopting ASC 326 | 23 | 16 | |
Provision (benefit) | (2) | 0 | |
Charge-offs | (1) | 0 | |
Recoveries | 0 | 1 | |
Ending allowance balance | 23 | 16 | |
Consumer Loans | Other Consumer | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 6 | 3 | |
Impact of adopting ASC 326 | 16 | 4 | |
Provision (benefit) | 0 | 2 | |
Charge-offs | (1) | (1) | |
Recoveries | 1 | 0 | |
Ending allowance balance | 16 | 4 | |
Commercial loans | Commercial real estate | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 38 | 48 | |
Impact of adopting ASC 326 | 28 | 36 | |
Provision (benefit) | 4 | (12) | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Ending allowance balance | 28 | 36 | |
Commercial loans | Commercial and industrial | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 22 | 18 | |
Impact of adopting ASC 326 | 18 | 30 | |
Provision (benefit) | 2 | 12 | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Ending allowance balance | 18 | 30 | |
Commercial loans | Warehouse lending | |||
Allowance for Loan Losses [Roll Forward] | |||
Beginning balance, prior to adoption of ASC 326 | 5 | 6 | |
Impact of adopting ASC 326 | 1 | 6 | |
Provision (benefit) | 0 | 0 | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Ending allowance balance | $ 1 | $ 6 | |
Impact of ASC 326 Adoption | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | 23 | ||
Impact of ASC 326 Adoption | Consumer Loans | Residential first mortgage loans | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | 25 | ||
Impact of ASC 326 Adoption | Consumer Loans | Home equity | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | 12 | ||
Impact of ASC 326 Adoption | Consumer Loans | Other Consumer | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | 10 | ||
Impact of ASC 326 Adoption | Commercial loans | Commercial real estate | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | (14) | ||
Impact of ASC 326 Adoption | Commercial loans | Commercial and industrial | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | (6) | ||
Impact of ASC 326 Adoption | Commercial loans | Warehouse lending | |||
Allowance for Loan Losses [Roll Forward] | |||
Impact of adopting ASC 326 | $ (4) |
Loans Held-for-Investment - S_3
Loans Held-for-Investment - Summary of Amortized Cost (Details) - Consumer loans | Mar. 31, 2020USD ($) |
Servicing Asset at Amortized Cost [Line Items] | |
Amortized cost basis | $ 66 |
Residential first mortgage loans | |
Servicing Asset at Amortized Cost [Line Items] | |
Amortized cost basis | 44 |
Home equity | |
Servicing Asset at Amortized Cost [Line Items] | |
Amortized cost basis | 20 |
Other | |
Servicing Asset at Amortized Cost [Line Items] | |
Amortized cost basis | $ 2 |
Loans Held-for-Investment - Agi
Loans Held-for-Investment - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Loans, Aging [Abstract] | ||
Total Past Due | $ 55 | $ 40 |
Current | 13,740 | 12,089 |
Total LHFI | 13,795 | 12,129 |
Loans greater than 90 days past due accounted for under the fair value option | 4 | |
30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 21 | 9 |
60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 5 | 5 |
90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 29 | 26 |
Consumer loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 48 | 40 |
Current | 4,802 | 4,867 |
Total LHFI | 4,850 | 4,907 |
Consumer loans | Residential first mortgage loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 35 | 30 |
Current | 2,929 | 3,124 |
Total LHFI | 2,964 | 3,154 |
Consumer loans | Home equity | ||
Loans, Aging [Abstract] | ||
Total Past Due | 6 | 5 |
Current | 1,022 | 1,019 |
Total LHFI | 1,028 | 1,024 |
Consumer loans | Other | ||
Loans, Aging [Abstract] | ||
Total Past Due | 7 | 5 |
Current | 851 | 724 |
Total LHFI | 858 | 729 |
Consumer loans | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 14 | 9 |
Consumer loans | 30-59 Days Past Due | Residential first mortgage loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 8 | 5 |
Consumer loans | 30-59 Days Past Due | Home equity | ||
Loans, Aging [Abstract] | ||
Total Past Due | 2 | 1 |
Consumer loans | 30-59 Days Past Due | Other | ||
Loans, Aging [Abstract] | ||
Total Past Due | 4 | 3 |
Consumer loans | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 5 | 5 |
Consumer loans | 60-89 Days Past Due | Residential first mortgage loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 3 | 4 |
Consumer loans | 60-89 Days Past Due | Home equity | ||
Loans, Aging [Abstract] | ||
Total Past Due | 1 | 0 |
Consumer loans | 60-89 Days Past Due | Other | ||
Loans, Aging [Abstract] | ||
Total Past Due | 1 | 1 |
Consumer loans | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 29 | 26 |
Consumer loans | 90 Days or Greater Past Due | Residential first mortgage loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 24 | 21 |
Consumer loans | 90 Days or Greater Past Due | Home equity | ||
Loans, Aging [Abstract] | ||
Total Past Due | 3 | 4 |
Consumer loans | 90 Days or Greater Past Due | Other | ||
Loans, Aging [Abstract] | ||
Total Past Due | 2 | 1 |
Commercial loans | ||
Loans, Aging [Abstract] | ||
Total Past Due | 7 | 0 |
Current | 8,938 | 7,222 |
Total LHFI | 8,945 | 7,222 |
Commercial loans | Commercial real estate | ||
Loans, Aging [Abstract] | ||
Total Past Due | 6 | 0 |
Current | 3,086 | 2,828 |
Total LHFI | 3,092 | 2,828 |
Commercial loans | Commercial and industrial | ||
Loans, Aging [Abstract] | ||
Total Past Due | 1 | 0 |
Current | 1,879 | 1,634 |
Total LHFI | 1,880 | 1,634 |
Commercial loans | Warehouse lending | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Current | 3,973 | 2,760 |
Total LHFI | 3,973 | 2,760 |
Commercial loans | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 7 | 0 |
Commercial loans | 30-59 Days Past Due | Commercial real estate | ||
Loans, Aging [Abstract] | ||
Total Past Due | 6 | 0 |
Commercial loans | 30-59 Days Past Due | Commercial and industrial | ||
Loans, Aging [Abstract] | ||
Total Past Due | 1 | 0 |
Commercial loans | 30-59 Days Past Due | Warehouse lending | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Commercial real estate | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Commercial and industrial | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Warehouse lending | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or Greater Past Due | Commercial real estate | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or Greater Past Due | Commercial and industrial | ||
Loans, Aging [Abstract] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or Greater Past Due | Warehouse lending | ||
Loans, Aging [Abstract] | ||
Total Past Due | $ 0 | $ 0 |
Loans Held-for-Investment - S_4
Loans Held-for-Investment - Summary of TDRs by Type and Performing Status (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Troubled Debt Restructurings | |||||
TDRs | $ 47 | $ 48 | |||
Impact of adopting ASC 326 | 132 | $ 107 | 107 | $ 127 | $ 128 |
TDR loans under fair value option | 2 | ||||
Consumer Loans | Residential first mortgage loans | |||||
Troubled Debt Restructurings | |||||
TDRs | 28 | 28 | |||
Impact of adopting ASC 326 | 46 | 22 | 35 | 38 | |
Consumer Loans | Home equity | |||||
Troubled Debt Restructurings | |||||
TDRs | 19 | 20 | |||
Impact of adopting ASC 326 | 23 | 14 | $ 16 | $ 15 | |
Performing | |||||
Troubled Debt Restructurings | |||||
TDRs | 37 | 38 | |||
Performing | Consumer Loans | Residential first mortgage loans | |||||
Troubled Debt Restructurings | |||||
TDRs | 20 | 20 | |||
Performing | Consumer Loans | Home equity | |||||
Troubled Debt Restructurings | |||||
TDRs | 17 | 18 | |||
Nonperforming | |||||
Troubled Debt Restructurings | |||||
TDRs | 10 | 10 | |||
Nonperforming | Consumer Loans | Residential first mortgage loans | |||||
Troubled Debt Restructurings | |||||
TDRs | 8 | 8 | |||
Nonperforming | Consumer Loans | Home equity | |||||
Troubled Debt Restructurings | |||||
TDRs | 2 | 2 | |||
Troubled debt restructurings | |||||
Troubled Debt Restructurings | |||||
Impact of adopting ASC 326 | $ 5 | $ 8 |
Loans Held-for-Investment - S_5
Loans Held-for-Investment - Summary of Newly Modified TDR's (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)loan | Mar. 31, 2019USD ($)loan | |
Troubled Debt Restructurings | ||
Number of Accounts | loan | 8 | 4 |
Pre-Modification Unpaid Principal Balance | $ 1 | $ 0 |
Post-Modification unpaid principal balance | $ 1 | $ 0 |
Residential first mortgage loans | ||
Troubled Debt Restructurings | ||
Number of loans modified in previous 12 months that have defaulted | loan | 1 | 0 |
Consumer loans | Residential first mortgage loans | ||
Troubled Debt Restructurings | ||
Number of Accounts | loan | 5 | 2 |
Pre-Modification Unpaid Principal Balance | $ 1 | $ 0 |
Post-Modification unpaid principal balance | $ 1 | $ 0 |
Consumer loans | Home equity | ||
Troubled Debt Restructurings | ||
Number of Accounts | loan | 2 | 2 |
Pre-Modification Unpaid Principal Balance | $ 0 | $ 0 |
Post-Modification unpaid principal balance | $ 0 | $ 0 |
Consumer loans | Consumer | ||
Troubled Debt Restructurings | ||
Number of Accounts | loan | 1 | |
Pre-Modification Unpaid Principal Balance | $ 0 | |
Post-Modification unpaid principal balance | $ 0 |
Loans Held-for-Investment - Imp
Loans Held-for-Investment - Impaired Loans (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Receivables [Abstract] | |
Interest Income Recognized | $ 1 |
Loans Held-for-Investment - Loa
Loans Held-for-Investment - Loan Credit Quality Indicators (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Loans held-for-investment | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 13,795 | $ 12,129 |
Consumer loans | ||
Loans held-for-investment | ||
Loans held-for-investment | 4,850 | |
Loans held-for-investment, net | 4,850 | 4,907 |
Consumer loans | Residential first mortgage loans | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 2,964 | 3,154 |
Consumer loans | Residential first mortgage loans | Pass | ||
Loans held-for-investment | ||
Loans held-for-investment | 2,914 | |
Consumer loans | Residential first mortgage loans | Watch | ||
Loans held-for-investment | ||
Loans held-for-investment | 26 | |
Consumer loans | Residential first mortgage loans | Substandard | ||
Loans held-for-investment | ||
Loans held-for-investment | 24 | |
Consumer loans | Home equity | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 1,028 | 1,024 |
Consumer loans | Home equity | Pass | ||
Loans held-for-investment | ||
Loans held-for-investment | 1,007 | |
Consumer loans | Home equity | Watch | ||
Loans held-for-investment | ||
Loans held-for-investment | 17 | |
Consumer loans | Home equity | Substandard | ||
Loans held-for-investment | ||
Loans held-for-investment | 4 | |
Consumer loans | Other Consumer | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 858 | 729 |
Commercial loans | ||
Loans held-for-investment | ||
Loans held-for-investment | 8,945 | |
Loans held-for-investment, net | 8,945 | 7,222 |
Commercial loans | Commercial real estate | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 3,092 | 2,828 |
Commercial loans | Commercial real estate | Pass | ||
Loans held-for-investment | ||
Loans held-for-investment | 2,862 | |
Commercial loans | Commercial real estate | Watch | ||
Loans held-for-investment | ||
Loans held-for-investment | 218 | |
Commercial loans | Commercial real estate | Special Mention | ||
Loans held-for-investment | ||
Loans held-for-investment | 7 | |
Commercial loans | Commercial real estate | Substandard | ||
Loans held-for-investment | ||
Loans held-for-investment | 5 | |
Commercial loans | Commercial and industrial | ||
Loans held-for-investment | ||
Loans held-for-investment, net | 1,880 | 1,634 |
Commercial loans | Commercial and industrial | Pass | ||
Loans held-for-investment | ||
Loans held-for-investment | 1,781 | |
Commercial loans | Commercial and industrial | Watch | ||
Loans held-for-investment | ||
Loans held-for-investment | 57 | |
Commercial loans | Commercial and industrial | Special Mention | ||
Loans held-for-investment | ||
Loans held-for-investment | 38 | |
Commercial loans | Commercial and industrial | Substandard | ||
Loans held-for-investment | ||
Loans held-for-investment | 4 | |
Commercial loans | Warehouse lending | ||
Loans held-for-investment | ||
Loans held-for-investment, net | $ 3,973 | $ 2,760 |
Loans Held-for-Investment - S_6
Loans Held-for-Investment - Summary of the Amortized Cost in Residential and Consumer Loans based on Payment Activity (Details) $ in Millions | Mar. 31, 2020USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Total loans | |
Consumer Loans | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 157 |
2019 | 1,216 |
2018 | 605 |
2017 | 503 |
2016 | 423 |
Prior | 735 |
Revolving Loans Amortized Cost Basis | 1,189 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 22 |
Total loans | 4,850 |
Consumer Loans | Residential first mortgage and home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 89 |
2019 | 824 |
2018 | 405 |
2017 | 497 |
2016 | 420 |
Prior | 730 |
Revolving Loans Amortized Cost Basis | 1,009 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 18 |
Total loans | 3,992 |
Commercial loans | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 423 |
2019 | 1,643 |
2018 | 898 |
2017 | 980 |
2016 | 577 |
Prior | 427 |
Revolving Loans Amortized Cost Basis | 3,997 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 8,945 |
750 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 40 |
2019 | 412 |
2018 | 202 |
2017 | 337 |
2016 | 316 |
Prior | 399 |
Revolving Loans Amortized Cost Basis | 68 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2 |
Total loans | 1,776 |
750 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 1 |
2019 | 15 |
2018 | 9 |
2017 | 4 |
2016 | 1 |
Prior | 10 |
Revolving Loans Amortized Cost Basis | 400 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 3 |
Total loans | 443 |
750 | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 46 |
2019 | 250 |
2018 | 104 |
2017 | 3 |
2016 | 2 |
Prior | 3 |
Revolving Loans Amortized Cost Basis | 93 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 |
Total loans | 502 |
700-750 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 35 |
2019 | 257 |
2018 | 146 |
2017 | 132 |
2016 | 92 |
Prior | 192 |
Revolving Loans Amortized Cost Basis | 35 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 |
Total loans | 890 |
700-750 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 2 |
2019 | 18 |
2018 | 8 |
2017 | 5 |
2016 | 1 |
Prior | 14 |
Revolving Loans Amortized Cost Basis | 348 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 7 |
Total loans | 403 |
700-750 | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 20 |
2019 | 128 |
2018 | 75 |
2017 | 2 |
2016 | 1 |
Prior | 1 |
Revolving Loans Amortized Cost Basis | 59 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 |
Total loans | 287 |
700 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 9 |
2019 | 109 |
2018 | 34 |
2017 | 17 |
2016 | 8 |
Prior | 105 |
Revolving Loans Amortized Cost Basis | 14 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2 |
Total loans | 298 |
700 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 2 |
2019 | 13 |
2018 | 7 |
2017 | 2 |
2016 | 1 |
Prior | 10 |
Revolving Loans Amortized Cost Basis | 144 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 3 |
Total loans | 182 |
700 | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 2 |
2019 | 14 |
2018 | 20 |
2017 | 1 |
2016 | 1 |
Prior | 1 |
Revolving Loans Amortized Cost Basis | 28 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2 |
Total loans | 69 |
Pass | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 85 |
2019 | 775 |
2018 | 377 |
2017 | 482 |
2016 | 416 |
Prior | 658 |
Revolving Loans Amortized Cost Basis | 116 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 |
Total loans | 2,914 |
Pass | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 4 |
2019 | 47 |
2018 | 23 |
2017 | 11 |
2016 | 3 |
Prior | 17 |
Revolving Loans Amortized Cost Basis | 890 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 12 |
Total loans | 1,007 |
Pass | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 68 |
2019 | 391 |
2018 | 197 |
2017 | 6 |
2016 | 3 |
Prior | 8 |
Revolving Loans Amortized Cost Basis | 179 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 3 |
Total loans | 855 |
Pass | Commercial loans | Commercial real estate | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 166 |
2019 | 999 |
2018 | 519 |
2017 | 546 |
2016 | 355 |
Prior | 278 |
Revolving Loans Amortized Cost Basis | (1) |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 2,862 |
Pass | Commercial loans | Commercial and industrial | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 236 |
2019 | 614 |
2018 | 277 |
2017 | 332 |
2016 | 184 |
Prior | 114 |
Revolving Loans Amortized Cost Basis | 24 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 1,781 |
Pass | Commercial loans | Warehouse | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 3,720 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 3,720 |
Watch | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 1 |
2018 | 1 |
2017 | 1 |
2016 | 1 |
Prior | 21 |
Revolving Loans Amortized Cost Basis | 1 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 26 |
Watch | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 15 |
Revolving Loans Amortized Cost Basis | 2 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 17 |
Watch | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 1 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 1 |
Watch | Commercial loans | Commercial real estate | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 20 |
2019 | 13 |
2018 | 71 |
2017 | 42 |
2016 | 38 |
Prior | 34 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 218 |
Watch | Commercial loans | Commercial and industrial | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 1 |
2019 | 6 |
2018 | 6 |
2017 | 42 |
2016 | 0 |
Prior | 1 |
Revolving Loans Amortized Cost Basis | 1 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 57 |
Watch | Commercial loans | Warehouse | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 222 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 222 |
Special Mention | Commercial loans | Commercial real estate | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 7 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 7 |
Special Mention | Commercial loans | Commercial and industrial | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 11 |
2018 | 18 |
2017 | 9 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 38 |
Special Mention | Commercial loans | Warehouse | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 31 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 31 |
Substandard | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 2 |
2018 | 5 |
2017 | 3 |
2016 | 0 |
Prior | 14 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 24 |
Substandard | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 2 |
Revolving Loans Amortized Cost Basis | 1 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 |
Total loans | 4 |
Substandard | Consumer Loans | Other Consumer | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 1 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 |
Total loans | 2 |
Substandard | Commercial loans | Commercial real estate | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 5 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 5 |
Substandard | Commercial loans | Commercial and industrial | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 4 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 4 |
Substandard | Commercial loans | Warehouse | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 0 |
90 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 22 |
2019 | 321 |
2018 | 189 |
2017 | 49 |
2016 | 4 |
Prior | 23 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 608 |
90 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 1 |
2016 | 1 |
Prior | 15 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 17 |
71-90 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 37 |
2019 | 275 |
2018 | 112 |
2017 | 170 |
2016 | 110 |
Prior | 326 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 1,030 |
71-90 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 3 |
2019 | 35 |
2018 | 17 |
2017 | 8 |
2016 | 2 |
Prior | 13 |
Revolving Loans Amortized Cost Basis | 478 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 |
Total loans | 561 |
55-70 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 18 |
2019 | 109 |
2018 | 41 |
2017 | 146 |
2016 | 158 |
Prior | 209 |
Revolving Loans Amortized Cost Basis | 0 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 |
Total loans | 681 |
55 | Consumer Loans | Residential first mortgage | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 8 |
2019 | 73 |
2018 | 40 |
2017 | 121 |
2016 | 144 |
Prior | 137 |
Revolving Loans Amortized Cost Basis | 117 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 |
Total loans | 645 |
70 | Consumer Loans | Home equity | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 1 |
2019 | 11 |
2018 | 6 |
2017 | 2 |
2016 | 1 |
Prior | 7 |
Revolving Loans Amortized Cost Basis | 414 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 8 |
Total loans | $ 450 |
Loans with Government Guarant_2
Loans with Government Guarantees (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Debt instrument, term | 10 years | |
Repossessed assets and associated claims | $ 40 | $ 45 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - entity | Mar. 31, 2020 | Dec. 31, 2019 |
Disclosure of Transfer of Securitizations or Asset-backed Financing Financial Assets Accounted for as Sale [Abstract] | ||
Number of VIEs | 0 | 0 |
Agency - Commercial | ||
Private-label Securitizations | ||
Ownership interest investment | 5.00% |
Mortgage Servicing Rights - Cha
Mortgage Servicing Rights - Changes in the Fair Value of Residential First Mortgage MSRs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Servicing Asset at Fair Value [Roll Forward] | ||
Balance at beginning of period | $ 291 | |
Fair value of MSRs at end of period | 223 | |
Residential First Mortgage MSRs | ||
Servicing Asset at Fair Value [Roll Forward] | ||
Balance at beginning of period | 291 | $ 290 |
Additions from loans sold with servicing retained | 40 | 67 |
Reductions from sales | (36) | (45) |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) | (22) | (11) |
Changes in estimates of fair value due to interest rate risk | (50) | (23) |
Fair value of MSRs at end of period | $ 223 | $ 278 |
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 | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Actual | ||
Option adjusted spread | 5.56% | 5.34% |
Constant prepayment rate | 12.04% | 10.59% |
Weighted average cost to service per loan (in dollars per share) | $ 84.59 | $ 84.41 |
Fair value impact due to 10% adverse change | ||
Option adjusted spread | $ 220 | $ 284 |
Constant prepayment rate | 206 | 271 |
Weighted average cost to service per loan (in dollars per share) | 221 | 285 |
Fair value impact due to 20% adverse change | ||
Option adjusted spread | 217 | 280 |
Constant prepayment rate | 191 | 257 |
Weighted average cost to service per loan (in dollars per share) | $ 218 | $ 282 |
Mortgage Servicing Rights - S_2
Mortgage Servicing Rights - Summary of Income and Fees (Details) - Residential first mortgage loans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Servicing Assets at Fair Value [Line Items] | ||
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) | $ (22) | $ (11) |
Changes in fair value due to interest rate risk | (50) | (23) |
Net return (loss) on mortgage servicing rights | ||
Servicing Assets at Fair Value [Line Items] | ||
Servicing fees, ancillary income and late fees | 21 | 19 |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) | (22) | (11) |
Changes in fair value due to interest rate risk | (50) | (23) |
Gain on MSR derivatives | 58 | 22 |
Net transaction costs | (1) | (1) |
Total return (loss) included in net return on mortgage servicing rights | 6 | 6 |
Loan administration income on mortgage loans subserviced | ||
Servicing Assets at Fair Value [Line Items] | ||
Servicing fees, ancillary income and late fees | 31 | 24 |
Charges on subserviced custodial balances (2) | (16) | (12) |
Other servicing charges | (3) | (1) |
Total income on mortgage loans subserviced, included in loan administration | $ 12 | $ 11 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional Amount, Estimated Fair Value and Maturity of Derivative Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives in fair value hedge relationships | ||
Assets | ||
Fair value | $ 2 | |
Liabilities | ||
Fair value | $ 0 | |
Derivatives in fair value hedge relationships | Other assets | ||
Assets | ||
Notional amount | 1,150 | 300 |
Fair value | 2 | 0 |
Derivatives in fair value hedge relationships | Other liabilities | ||
Liabilities | ||
Notional amount | 100 | |
Fair value | 0 | |
Derivatives in fair value hedge relationships | Interest rate swaps on custodial deposits | ||
Assets | ||
Fair value | 2 | |
Derivatives in fair value hedge relationships | Interest rate swaps on custodial deposits | Other assets | ||
Assets | ||
Notional amount | 800 | 200 |
Fair value | 2 | 0 |
Derivatives in fair value hedge relationships | Interest rate swaps on AFS securities | ||
Assets | ||
Fair value | 0 | |
Liabilities | ||
Fair value | 0 | |
Derivatives in fair value hedge relationships | Interest rate swaps on AFS securities | Other assets | ||
Assets | ||
Notional amount | 350 | 100 |
Fair value | 0 | 0 |
Derivatives in fair value hedge relationships | Interest rate swaps on AFS securities | Other liabilities | ||
Liabilities | ||
Notional amount | 100 | |
Fair value | 0 | |
Derivatives not designated as hedging instruments | ||
Assets | ||
Fair value | 106 | 28 |
Liabilities | ||
Fair value | 288 | 17 |
Derivatives not designated as hedging instruments | Other assets | ||
Assets | ||
Notional amount | 10,531 | 7,137 |
Fair value | 275 | 62 |
Liabilities | ||
Notional amount | 7,640 | |
Fair value | 18 | |
Derivatives not designated as hedging instruments | Other liabilities | ||
Liabilities | ||
Notional amount | 11,080 | |
Fair value | 288 | |
Derivatives not designated as hedging instruments | Futures | ||
Assets | ||
Fair value | 1 | |
Derivatives not designated as hedging instruments | Futures | Other assets | ||
Assets | ||
Notional amount | 1,103 | 550 |
Fair value | 1 | 0 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | ||
Assets | ||
Fair value | 39 | 2 |
Liabilities | ||
Fair value | 278 | 9 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | Other assets | ||
Assets | ||
Notional amount | 232 | 1,918 |
Fair value | 39 | 2 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | Other liabilities | ||
Liabilities | ||
Notional amount | 9,548 | 5,749 |
Fair value | 278 | 9 |
Derivatives not designated as hedging instruments | Rate lock commitments | Other assets | ||
Assets | ||
Notional amount | 8,318 | 3,870 |
Fair value | 169 | 34 |
Derivatives not designated as hedging instruments | Rate lock commitments | Other liabilities | ||
Liabilities | ||
Notional amount | 27 | 229 |
Fair value | 0 | 1 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Liabilities | ||
Fair value | 10 | 8 |
Derivatives not designated as hedging instruments | Interest rate swaps | Other assets | ||
Assets | ||
Notional amount | 878 | 799 |
Fair value | 66 | 26 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Assets | ||
Fair value | 66 | 26 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | Other liabilities | ||
Liabilities | ||
Notional amount | 1,505 | 1,662 |
Fair value | $ 10 | $ 8 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Derivatives Subject to a Master Netting Arrangement (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Liabilities | ||
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | $ 325 | $ 63 |
Derivatives in fair value hedge relationships | ||
Assets | ||
Gross Amount | 2 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 2 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 20 | |
Liabilities | ||
Gross Amount | 0 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 2 | |
Derivatives in fair value hedge relationships | Interest rate swaps on AFS securities | ||
Assets | ||
Gross Amount | 0 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 6 | |
Liabilities | ||
Gross Amount | 0 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 2 | |
Derivatives in fair value hedge relationships | Interest rate swaps on custodial deposits | ||
Assets | ||
Gross Amount | 2 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 2 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 14 | |
Derivatives not designated as hedging instruments | ||
Assets | ||
Gross Amount | 106 | 28 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 106 | 28 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 3 | 0 |
Liabilities | ||
Gross Amount | 288 | 17 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 288 | 17 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 300 | 63 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | ||
Assets | ||
Gross Amount | 39 | 2 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 39 | 2 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 0 | 0 |
Liabilities | ||
Gross Amount | 278 | 9 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 278 | 9 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 269 | 24 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Assets | ||
Gross Amount | 66 | 26 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 66 | 26 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 3 | 0 |
Derivatives not designated as hedging instruments | Futures | ||
Assets | ||
Gross Amount | 1 | |
Gross Amounts Netted in the Statements of Financial Condition | 0 | |
Net Amount Presented in the Statements of Financial Condition | 1 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 0 | |
Derivatives not designated as hedging instruments | Interest rate swaps and swamptions | ||
Liabilities | ||
Gross Amount | 10 | 8 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 10 | 8 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | $ 31 | $ 39 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Derivatives and hedging activities | $ 4 | $ 0 | $ 0 |
Right to reclaim cash | 325 | 63 | |
Right to reclaim cash, cash collateral | 284 | 34 | |
Right to reclaim cash, maintenance margin | 41 | 29 | |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | 2 | ||
Interest rate swaps on AFS securities | |||
Derivative [Line Items] | |||
Amortized cost basis of hedge designated last of layer | 1,380 | 289 | |
Amount representing designated last of layer | 1,380 | 291 | |
Assets | |||
Derivative [Line Items] | |||
Right to reclaim cash | 2 | ||
Obligation to return cash | 20 | ||
Assets | Interest rate swaps on AFS securities | |||
Derivative [Line Items] | |||
Cumulative amount of fair value hedging adjustment included in the carrying amount | 6 | 1 | |
Amount representing designated last of layer | 450 | 100 | |
Right to reclaim cash | 2 | ||
Obligation to return cash | 6 | ||
Carrying Value | Assets | Interest rate swaps on AFS securities | |||
Derivative [Line Items] | |||
Carrying amount of hedged securities | 1,403 | ||
Carrying Value | Assets | FLHB Advances | |||
Derivative [Line Items] | |||
Carrying amount of hedged securities | 287 | ||
Cash Flow Hedges | |||
Derivative [Line Items] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 0 | $ 0 | |
Cash Flow Hedges | Interest Rate Contracts | |||
Derivative [Line Items] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | $ 0 | $ 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Net Gain (Loss) Recognized on Designated Instruments (Details) - Cash Flow Hedges - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) | |||
Amount of loss reclassified from AOCI into income | $ 0 | $ 0 | |
Interest Rate Contracts | |||
Derivative Instruments, Gain (Loss) | |||
Amount of loss reclassified from AOCI into income | $ 0 | $ 0 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Net Gain (Loss) Recognized in Income on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Derivative gain (loss) | $ (42) | $ 32 |
Futures | Net loss on mortgage servicing rights | ||
Derivative [Line Items] | ||
Derivative gain (loss) | 1 | 0 |
Interest rate swaps and swaptions | Net loss on mortgage servicing rights | ||
Derivative [Line Items] | ||
Derivative gain (loss) | 38 | 13 |
Mortgage-backed securities forwards | Net loss on mortgage servicing rights | ||
Derivative [Line Items] | ||
Derivative gain (loss) | 19 | 9 |
Rate lock commitments and forward agency and loan sales | Net gain (loss) on loan sales | ||
Derivative [Line Items] | ||
Derivative gain (loss) | (100) | 8 |
Forward commitments | Other noninterest income | ||
Derivative [Line Items] | ||
Derivative gain (loss) | 0 | 1 |
Interest rate swaps | Other noninterest income | ||
Derivative [Line Items] | ||
Derivative gain (loss) | $ 0 | $ 1 |
Borrowings - Breakdown of FHLB
Borrowings - Breakdown of FHLB Advances Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Short-term amount | $ 5,841 | $ 4,165 |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate at Period End | 1.19% | 1.45% |
Long-term Federal Home Loan Bank fixed rate advances | $ 1,000 | $ 650 |
Total | 6,841 | 4,815 |
Current portion of fixed rate advances | 0 | 0 |
Short-term fixed rate term advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Short-term amount | $ 5,336 | $ 3,695 |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate at Period End | 0.24% | 1.61% |
Other short-term borrowings | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Short-term amount | $ 505 | $ 470 |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate at Period End | 0.20% | 1.64% |
Borrowings - Detailed Informati
Borrowings - Detailed Information on FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Maximum outstanding at any month end | $ 6,841 | $ 3,391 |
Average outstanding balance | 4,359 | 2,878 |
Average remaining borrowing capacity | $ 4,977 | $ 3,314 |
Weighted average interest rate | 1.32% | 2.45% |
Borrowings - Maturity Dates of
Borrowings - Maturity Dates of FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2020 | $ 5,841 | |
2021 | 0 | |
2022 | 0 | |
2023 | 500 | |
Thereafter | 500 | |
Total | $ 6,841 | $ 4,815 |
Borrowings - Summary of Long-Te
Borrowings - Summary of Long-Term Debt, Net of Debt Issuance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Senior notes | $ 249 | $ 246 |
Trust preferred securities | 247 | 247 |
Other tong-term debt | $ 496 | $ 493 |
Interest rate | 6.125% | 6.125% |
3.25%, matures 2032 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 5.20% | 4.48% |
3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 5.24% | 5.08% |
3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 5.21% | 4.62% |
2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 3.99% | 3.83% |
2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 3.99% | 3.83% |
1.75%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 51 | $ 51 |
Interest rate | 3.64% | 2.49% |
1.50%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 25 | $ 25 |
Interest rate | 3.49% | 3.33% |
1.45%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 25 | $ 25 |
Interest rate | 3.34% | 2.19% |
2.50%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 16 | $ 16 |
Interest rate | 4.39% | 3.24% |
Floating Three Month LIBOR | 3.25%, matures 2032 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 3.25% | |
Floating Three Month LIBOR | 3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 3.25% | |
Floating Three Month LIBOR | 3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 3.25% | |
Floating Three Month LIBOR | 2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 2.00% | |
Floating Three Month LIBOR | 2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 2.00% | |
Floating Three Month LIBOR | 1.75%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 1.75% | |
Floating Three Month LIBOR | 1.50%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 1.50% | |
Floating Three Month LIBOR | 1.45%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 1.45% | |
Floating Three Month LIBOR | 2.50%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 2.50% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | Jul. 11, 2016USD ($) | Mar. 31, 2020USD ($)trust_subsidiary |
Debt Instrument [Line Items] | ||
Number of trust subsidiaries | trust_subsidiary | 9 | |
Payment of interest on trust preferred securities | $ 0 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Extinguishment of debt | $ 3,000,000 | |
Senior Notes [Member] | Senior Notes Maturing July 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 250,000,000 | |
Debt instrument redemption rate | 100.00% | |
Senior Notes [Member] | Senior Notes Maturing July 2021 | Treasury Rate | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 0.50% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accumulated other comprehensive income (loss) | |||
Beginning balance | $ 1,788 | $ 1,570 | $ 1,570 |
Other comprehensive income, net of tax | 30 | 16 | |
Ending balance | 1,842 | 1,574 | 1,788 |
Investment Securities | |||
Accumulated other comprehensive income (loss) | |||
Beginning balance | 1 | (47) | (47) |
Unrealized gain | 45 | 21 | |
Less: Tax provision | 11 | 5 | |
Net unrealized loss, net of tax | 34 | 16 | |
Reclassification out of AOCI | 0 | 0 | |
Less: Tax provision | 0 | 0 | |
Net unrealized gain reclassified out of AOCI | 0 | 0 | |
Other comprehensive income, net of tax | 34 | 16 | |
Ending balance | 35 | (31) | 1 |
Cash Flow Hedges | |||
Accumulated other comprehensive income (loss) | |||
Beginning balance | 0 | 0 | 0 |
Unrealized gain | (5) | 0 | |
Less: Tax provision | (1) | 0 | |
Net unrealized loss, net of tax | (4) | 0 | |
Reclassification out of AOCI | 0 | 0 | |
Less: Tax provision | 0 | 0 | |
Net unrealized gain reclassified out of AOCI | 0 | 0 | |
Other comprehensive income, net of tax | (4) | 0 | |
Ending balance | $ (4) | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income | $ 46 | $ 36 |
Weighted Average Shares | ||
Weighted average common shares outstanding (in shares) | 56,655,865 | 56,897,799 |
Effect of dilutive securities | ||
Stock-based awards (in shares) | 534,058 | 692,473 |
Weighted average diluted common shares (in shares) | 57,189,923 | 57,590,272 |
Earnings per common share | ||
Basic earnings per common share (in dollars per share) | $ 0.80 | $ 0.64 |
Effect of dilutive securities | ||
Stock-based awards (in dollars per share) | 0 | (0.01) |
Diluted earnings per common share (in dollars per share) | $ 0.80 | $ 0.63 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense | $ 3 | $ 3 |
Employee Stock Purchase Plan | 2017 ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation shares authorized (in shares) | 800,000 | |
Shares available for issuance (in shares) | 472,677 | |
Shares issued during period (in shares) | 59,252 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Non-vested balance at beginning of period (in shares) | shares | 1,399,127 |
Granted (in shares) | shares | 58,888 |
Vested (in shares) | shares | (45,904) |
Canceled and forfeited (in shares) | shares | (30,189) |
Non-vested balance at end of period (in shares) | shares | 1,381,922 |
Weighted — Average Grant-Date Fair Value per Share | |
Non-vested balance at beginning of period (in dollars per share) | $ / shares | $ 28.72 |
Granted (in dollars per share) | $ / shares | 26.03 |
Vested (in dollars per share) | $ / shares | 29.47 |
Canceled and forfeited (in dollars per share) | $ / shares | 33.86 |
Non-vested balance at end of period (in dollars per share) | $ / shares | $ 28.47 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 10 | $ 8 |
Effective tax provision rate | 18.50% | 18.40% |
Unrecognized tax benefits, recognition period | 12 months |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Tier One Leverage Capital | ||
Tier 1 capital actual amount | $ 1,879 | $ 1,720 |
Tier 1 capital (to adjusted tangible assets), actual ratio | 8.09% | 7.57% |
Tier 1 capital, for capital adequacy purposes amount | $ 928 | $ 909 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio | 4.00% | 4.00% |
Tier 1 capital capitalized under prompt corrective action provision amount | $ 1,161 | $ 1,136 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,639 | $ 1,480 |
Common equity Tier 1 capital (to RWA), actual ratio | 9.17% | 9.32% |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, amount | $ 804 | $ 715 |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, ratio | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), well capitalized under prompt corrective action provisions, amount | $ 1,161 | $ 1,033 |
Common equity Tier 1 capital (to RWA), well capitalized under prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier One Risk Based Capital [Abstract] | ||
Tier 1 capital, actual amount | $ 1,879 | $ 1,720 |
Tier 1 capital (to risk-weighted assets), actual ratio | 10.52% | 10.83% |
Tier 1 capital, for capital adequacy purposes amount | $ 1,072 | $ 953 |
Tier 1 capital (to risk-weighted assets), for capital adequacy purposes ratio | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,429 | $ 1,271 |
Tier 1 capital (to risk-weighted assets), capitalized under prompt corrective action provision ratio | 8.00% | 8.00% |
Capital [Abstract] | ||
Total capital, actual amount | $ 1,997 | $ 1,830 |
Total capital (to risk-weighted assets), actual ratio | 11.18% | 11.52% |
Total capital, for capital adequacy purposes amount | $ 1,429 | $ 1,271 |
Total capital (to risk-weighted assets), for capital adequacy purposes ratio | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,786 | $ 1,589 |
Total capital (to risk-weighted assets), capitalized under prompt corrective action provisions ratio | 10.00% | 10.00% |
Bank | ||
Tier One Leverage Capital | ||
Tier 1 capital actual amount | $ 1,900 | $ 1,752 |
Tier 1 capital (to adjusted tangible assets), actual ratio | 8.19% | 7.71% |
Tier 1 capital, for capital adequacy purposes amount | $ 928 | $ 909 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio | 4.00% | 4.00% |
Tier 1 capital capitalized under prompt corrective action provision amount | $ 1,160 | $ 1,136 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,900 | $ 1,752 |
Common equity Tier 1 capital (to RWA), actual ratio | 10.64% | 11.04% |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, amount | $ 804 | $ 714 |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, ratio | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), well capitalized under prompt corrective action provisions, amount | $ 1,161 | $ 1,032 |
Common equity Tier 1 capital (to RWA), well capitalized under prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier One Risk Based Capital [Abstract] | ||
Tier 1 capital, actual amount | $ 1,900 | $ 1,752 |
Tier 1 capital (to risk-weighted assets), actual ratio | 10.64% | 11.04% |
Tier 1 capital, for capital adequacy purposes amount | $ 1,071 | $ 952 |
Tier 1 capital (to risk-weighted assets), for capital adequacy purposes ratio | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,429 | $ 1,270 |
Tier 1 capital (to risk-weighted assets), capitalized under prompt corrective action provision ratio | 8.00% | 8.00% |
Capital [Abstract] | ||
Total capital, actual amount | $ 1,862 | |
Total capital (to risk-weighted assets), actual ratio | 11.30% | 11.73% |
Total capital, for capital adequacy purposes amount | $ 1,429 | $ 1,270 |
Total capital (to risk-weighted assets), for capital adequacy purposes ratio | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,786 | $ 1,587 |
Total capital (to risk-weighted assets), capitalized under prompt corrective action provisions ratio | 10.00% | 10.00% |
Legal Proceedings, Contingenc_3
Legal Proceedings, Contingencies and Commitments - Narrative (Details) - USD ($) | Feb. 24, 2012 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 30, 2018 | Dec. 31, 2013 |
Loss Contingencies | |||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 5.00% | 5.00% | |||
Tier 1 capital (to adjusted tangible assets), actual ratio | 8.09% | 7.57% | |||
Business acquisition threshold | 33.30% | ||||
Accrued reserve for contingent liabilities | $ 3,000,000 | $ 3,000,000 | |||
Letter of credit, reserve, amount | $ 0 | ||||
Bank | |||||
Loss Contingencies | |||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 5.00% | 5.00% | |||
Tier 1 capital (to adjusted tangible assets), actual ratio | 8.19% | 7.71% | |||
DOJ Agreement | Bank | |||||
Loss Contingencies | |||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 11.00% | ||||
DOJ Agreement | |||||
Loss Contingencies | |||||
Litigation settlement payment amount | $ 118,000,000 | ||||
Accrued reserve for contingent liabilities | $ 35,000,000 | ||||
DOJ Agreement | Subsequent Payments | |||||
Loss Contingencies | |||||
Litigation expense (up to) | $ 25,000,000 | ||||
CEO | SERP | |||||
Loss Contingencies | |||||
SERP Liability | $ 16,000,000 | $ 16,000,000 |
Legal Proceedings, Contingenc_4
Legal Proceedings, Contingencies and Commitments - Summary of the Contractual Amount of Significant Commitments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Mortgage loan commitments including interest-rate locks | ||
Loss Contingencies | ||
Commitments to extend credit | $ 8,345 | $ 4,099 |
Warehouse loan commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 2,258 | 1,944 |
Commercial and industrial commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 741 | 1,107 |
Other commercial commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 1,817 | 2,015 |
HELOC commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 580 | 558 |
Other consumer commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 272 | 175 |
Standby and commercial letters of credit | ||
Loss Contingencies | ||
Commitments to extend credit | $ 94 | $ 82 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Carried at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative assets | ||
Investment securities available-for-sale | $ 2,446 | $ 2,116 |
Loans held-for-sale, fair value | 4,365 | 5,219 |
Loans held-for-investment | 12 | 12 |
Mortgage servicing rights | 223 | 291 |
Total assets at fair value | 4,377 | 5,231 |
Agency - Commercial | ||
Derivative assets | ||
Investment securities available-for-sale | 1,285 | 947 |
Agency - Residential | ||
Derivative assets | ||
Investment securities available-for-sale | 1,004 | 1,015 |
Municipal obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 30 | 31 |
Corporate debt obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 67 | 77 |
Certificates of deposit | ||
Derivative assets | ||
Investment securities available-for-sale | 1 | 1 |
Total Fair Value | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 2,058 | |
Derivative assets | ||
Investment securities available-for-sale | 2,446 | 2,116 |
Loans held-for-sale, fair value | 4,390 | 5,258 |
Loans held-for-investment | 13,801 | 12,031 |
Mortgage servicing rights | 223 | 291 |
Derivative liabilities | ||
Contingent consideration | (16) | (10) |
Level 1 | Total Fair Value | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 0 | |
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Derivative liabilities | ||
Contingent consideration | 0 | 0 |
Level 2 | Total Fair Value | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 2,058 | |
Derivative assets | ||
Investment securities available-for-sale | 2,446 | 2,116 |
Loans held-for-sale, fair value | 4,390 | 5,258 |
Loans held-for-investment | 10 | 10 |
Mortgage servicing rights | 0 | 0 |
Derivative liabilities | ||
Contingent consideration | 0 | 0 |
Level 3 | Total Fair Value | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 0 | |
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 13,791 | 12,021 |
Mortgage servicing rights | 223 | 291 |
Derivative liabilities | ||
Contingent consideration | (16) | (10) |
Recurring | Total Fair Value | ||
Derivative assets | ||
Mortgage servicing rights | 223 | 291 |
Total assets at fair value | 9,381 | 7,700 |
Derivative liabilities | ||
DOJ Liability | (35) | (35) |
Total liabilities at fair value | (339) | (63) |
Recurring | Total Fair Value | Rate lock commitments | ||
Derivative assets | ||
Derivative assets | 169 | 34 |
Derivative liabilities | ||
Derivative liabilities | 0 | (1) |
Recurring | Total Fair Value | Interest rate swaps on custodial deposits | ||
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Total Fair Value | Futures | ||
Derivative assets | ||
Derivative assets | 1 | |
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Total Fair Value | Mortgage-backed securities forwards | ||
Derivative assets | ||
Derivative assets | 39 | 2 |
Derivative liabilities | ||
Derivative liabilities | (278) | (9) |
Recurring | Total Fair Value | Interest rate swaps and swaptions | ||
Derivative assets | ||
Derivative assets | 68 | 26 |
Recurring | Total Fair Value | Interest rate swaps | ||
Derivative liabilities | ||
Derivative liabilities | (10) | (8) |
Recurring | Total Fair Value | Contingent consideration | ||
Derivative liabilities | ||
Contingent consideration | (16) | (10) |
Recurring | Total Fair Value | Residential first mortgage loans | ||
Derivative assets | ||
Loans held-for-sale, fair value | 4,365 | 5,219 |
Loans held-for-investment | 10 | 10 |
Recurring | Total Fair Value | Commercial Loan | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Recurring | Total Fair Value | Home equity | ||
Derivative assets | ||
Loans held-for-investment | 2 | 2 |
Recurring | Total Fair Value | Agency - Commercial | ||
Derivative assets | ||
Investment securities available-for-sale | 1,285 | 947 |
Recurring | Total Fair Value | Agency - Residential | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 2,058 | |
Derivative assets | ||
Investment securities available-for-sale | 1,004 | 1,015 |
Recurring | Total Fair Value | Municipal obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 30 | 31 |
Recurring | Total Fair Value | Corporate debt obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 67 | 77 |
Recurring | Total Fair Value | Other MBS | ||
Derivative assets | ||
Investment securities available-for-sale | 59 | 45 |
Recurring | Total Fair Value | Certificates of deposit | ||
Derivative assets | ||
Investment securities available-for-sale | 1 | 1 |
Recurring | Level 1 | ||
Derivative assets | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 0 | 0 |
Derivative liabilities | ||
DOJ Liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Recurring | Level 1 | Rate lock commitments | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate swaps on custodial deposits | ||
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Futures | ||
Derivative assets | ||
Derivative assets | 0 | |
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Mortgage-backed securities forwards | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate swaps and swaptions | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Recurring | Level 1 | Interest rate swaps | ||
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Contingent consideration | ||
Derivative liabilities | ||
Contingent consideration | 0 | 0 |
Recurring | Level 1 | Residential first mortgage loans | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Commercial Loan | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Recurring | Level 1 | Home equity | ||
Derivative assets | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Agency - Commercial | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Agency - Residential | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 0 | |
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Municipal obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Corporate debt obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Other MBS | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Certificates of deposit | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 2 | ||
Derivative assets | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 8,987 | 7,373 |
Derivative liabilities | ||
DOJ Liability | 0 | 0 |
Total liabilities at fair value | (288) | (17) |
Recurring | Level 2 | Rate lock commitments | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 2 | Interest rate swaps on custodial deposits | ||
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Futures | ||
Derivative assets | ||
Derivative assets | 1 | |
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Mortgage-backed securities forwards | ||
Derivative assets | ||
Derivative assets | 39 | 2 |
Derivative liabilities | ||
Derivative liabilities | (278) | (9) |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Derivative assets | ||
Derivative assets | 68 | 26 |
Recurring | Level 2 | Interest rate swaps | ||
Derivative liabilities | ||
Derivative liabilities | (10) | (8) |
Recurring | Level 2 | Contingent consideration | ||
Derivative liabilities | ||
Contingent consideration | 0 | 0 |
Recurring | Level 2 | Residential first mortgage loans | ||
Derivative assets | ||
Loans held-for-sale, fair value | 4,365 | 5,219 |
Loans held-for-investment | 10 | 10 |
Recurring | Level 2 | Commercial Loan | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Recurring | Level 2 | Home equity | ||
Derivative assets | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 2 | Agency - Commercial | ||
Derivative assets | ||
Investment securities available-for-sale | 1,285 | 947 |
Recurring | Level 2 | Agency - Residential | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 2,058 | |
Derivative assets | ||
Investment securities available-for-sale | 1,004 | 1,015 |
Recurring | Level 2 | Municipal obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 30 | 31 |
Recurring | Level 2 | Corporate debt obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 67 | 77 |
Recurring | Level 2 | Other MBS | ||
Derivative assets | ||
Investment securities available-for-sale | 59 | 45 |
Recurring | Level 2 | Certificates of deposit | ||
Derivative assets | ||
Investment securities available-for-sale | 1 | 1 |
Recurring | Level 3 | ||
Derivative assets | ||
Mortgage servicing rights | 223 | 291 |
Total assets at fair value | 394 | 327 |
Derivative liabilities | ||
DOJ Liability | (35) | (35) |
Total liabilities at fair value | (51) | (46) |
Recurring | Level 3 | Rate lock commitments | ||
Derivative assets | ||
Derivative assets | 169 | 34 |
Derivative liabilities | ||
Derivative liabilities | 0 | (1) |
Recurring | Level 3 | Interest rate swaps on custodial deposits | ||
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 3 | Futures | ||
Derivative assets | ||
Derivative assets | 0 | |
Derivative liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 3 | Mortgage-backed securities forwards | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Interest rate swaps and swaptions | ||
Derivative assets | ||
Derivative assets | 0 | 0 |
Recurring | Level 3 | Interest rate swaps | ||
Derivative liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Contingent consideration | ||
Derivative liabilities | ||
Contingent consideration | (16) | (10) |
Recurring | Level 3 | Residential first mortgage loans | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 3 | Commercial Loan | ||
Derivative assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Recurring | Level 3 | Home equity | ||
Derivative assets | ||
Loans held-for-investment | 2 | 2 |
Recurring | Level 3 | Agency - Commercial | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Agency - Residential | ||
Securitized HFS loans not sold | ||
Securitized HFS loans not sold | 0 | |
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Municipal obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Corporate debt obligations | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Other MBS | ||
Derivative assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Certificates of deposit | ||
Derivative assets | ||
Investment securities available-for-sale | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Settlement liability | $ 3 | $ 3 | |
DOJ Agreement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value adjustment on settlement liability | 25 | ||
Settlement liability | $ 35 | ||
Residential mortgage servicing rights capitalized | Measurement input, expected term | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Weighted average life | 3 years 3 months 18 days | 4 years 1 month 6 days |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward of Financial Instruments Classified as Level 3 (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Liabilities | ||
Unrealized gains (losses) recorded in OCI | $ 0 | $ 0 |
Recurring | Level 3 | ||
Assets | ||
Balance at Beginning of Period | 327,000,000 | 312,000,000 |
Total Gains (Losses) Recorded in Earnings | 33,000,000 | (9,000,000) |
Purchases / Originations | 204,000,000 | 117,000,000 |
Sales | (36,000,000) | (45,000,000) |
Settlement | 0 | 0 |
Transfers In (Out) | (134,000,000) | (58,000,000) |
Balance at End of Period | 394,000,000 | 317,000,000 |
Liabilities | ||
Balance at Beginning of Period | (45,000,000) | (66,000,000) |
Total unrealized gains/(losses) recorded in earnings | (6,000,000) | 0 |
Purchases / Originations | 0 | 0 |
Sales | 0 | 0 |
Settlement | 0 | 0 |
Transfers In (Out) | 0 | 0 |
Balance at End of Period | (51,000,000) | (66,000,000) |
Recurring | Level 3 | Home equity | ||
Assets | ||
Balance at Beginning of Period | 2,000,000 | 2,000,000 |
Total Gains (Losses) Recorded in Earnings | 0 | 0 |
Purchases / Originations | 0 | 0 |
Sales | 0 | 0 |
Settlement | 0 | 0 |
Transfers In (Out) | 0 | 0 |
Balance at End of Period | 2,000,000 | 2,000,000 |
Recurring | Level 3 | Mortgage servicing rights | ||
Assets | ||
Balance at Beginning of Period | 291,000,000 | 290,000,000 |
Total Gains (Losses) Recorded in Earnings | (72,000,000) | (34,000,000) |
Purchases / Originations | 40,000,000 | 67,000,000 |
Sales | (36,000,000) | (45,000,000) |
Settlement | 0 | 0 |
Transfers In (Out) | 0 | 0 |
Balance at End of Period | 223,000,000 | 278,000,000 |
Recurring | Level 3 | Rate lock commitments | ||
Assets | ||
Balance at Beginning of Period | 34,000,000 | 20,000,000 |
Total Gains (Losses) Recorded in Earnings | 105,000,000 | 25,000,000 |
Purchases / Originations | 164,000,000 | 50,000,000 |
Sales | 0 | 0 |
Settlement | 0 | 0 |
Transfers In (Out) | (134,000,000) | (58,000,000) |
Balance at End of Period | 169,000,000 | 37,000,000 |
Recurring | Level 3 | DOJ Liability | ||
Liabilities | ||
Balance at Beginning of Period | (35,000,000) | (60,000,000) |
Total unrealized gains/(losses) recorded in earnings | 0 | 0 |
Purchases / Originations | 0 | 0 |
Sales | 0 | 0 |
Settlement | 0 | 0 |
Transfers In (Out) | 0 | 0 |
Balance at End of Period | (35,000,000) | (60,000,000) |
Recurring | Level 3 | Contingent consideration | ||
Liabilities | ||
Balance at Beginning of Period | (10,000,000) | (6,000,000) |
Total unrealized gains/(losses) recorded in earnings | (6,000,000) | 0 |
Purchases / Originations | 0 | 0 |
Sales | 0 | 0 |
Settlement | 0 | 0 |
Transfers In (Out) | 0 | 0 |
Balance at End of Period | $ (16,000,000) | $ (6,000,000) |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information about Recurring Level 3 Fair Value Instruments (Details) - Fair Value - Level 3 $ in Millions | Mar. 31, 2020USD ($)orgination_pull-through_rate_per_loan$ / loanoption_adjusted_spread_per_loandiscount_rate_per_loanconstant_default_rate_per_loanconstant_prepayment_rate_per_loan | 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 |
Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held-for-investment | $ | $ 2 | $ 2 |
Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset | $ | 223 | 291 |
Rate lock commitments (net) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ | 169 | 34 |
DOJ Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Litigation settlement at fair value | $ | 35 | 35 |
Contingent consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ | $ 16 | $ 10 |
Discount rate | Minimum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.072 | 0.072 |
Discount rate | Maximum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.108 | 0.108 |
Discount rate | Weighted Average | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.090 | 0.090 |
Constant prepayment rate | Minimum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constant_prepayment_rate_per_loan | 0.064 | 0.130 |
Constant prepayment rate | Minimum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constant_prepayment_rate_per_loan | 0 | 0 |
Constant prepayment rate | Maximum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constant_prepayment_rate_per_loan | 0.094 | 0.195 |
Constant prepayment rate | Maximum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constant_prepayment_rate_per_loan | 0.148 | 0.123 |
Constant prepayment rate | Weighted Average | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | 0.078 | 0.162 |
Constant prepayment rate | Weighted Average | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constant_prepayment_rate_per_loan | 0.120 | 0.106 |
Default rate | Minimum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.022 | 0.027 |
Default rate | Maximum | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.033 | 0.040 |
Default rate | Weighted Average | Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.028 | 0.033 |
Option volatility | Minimum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | option_adjusted_spread_per_loan | 0.036 | 0.024 |
Option volatility | Maximum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | option_adjusted_spread_per_loan | 0.199 | 0.204 |
Option volatility | Weighted Average | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | option_adjusted_spread_per_loan | 0.056 | 0.053 |
Weighted average cost to service per loan | Minimum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 67 | 67 |
Weighted average cost to service per loan | Maximum | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 95 | 95 |
Weighted average cost to service per loan | Weighted Average | Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 85 | 84 |
Origination pull-through rate | Minimum | Rate lock commitments (net) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orgination_pull-through_rate_per_loan | 0.800 | 0.750 |
Origination pull-through rate | Maximum | Rate lock commitments (net) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orgination_pull-through_rate_per_loan | 0.872 | 0.872 |
Origination pull-through rate | Weighted Average | Rate lock commitments (net) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orgination_pull-through_rate_per_loan | 0.819 | 0.768 |
Fair Value Measurements - Qua_2
Fair Value Measurements - Quantitative Information about Nonrecurring Level 3 Fair Value Financial Instruments (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020USD ($)loss_severity_discount_per_loan | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)loss_severity_discount_per_loan | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held-for-sale | $ 4,365 | $ 5,219 | |
Total assets at fair value | 4,377 | 5,231 | |
Net gain on loan sales | 90 | $ 49 | |
Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held-for-sale | 6 | 6 | |
Repossessed assets | 10 | 10 | |
Total assets at fair value | 31 | 30 | |
Fair value gains (losses) on loans | (1) | (1) | |
Fair value gains (losses) on repossessed assets | (4) | (3) | |
Net gain on loan sales | (8) | (9) | |
Nonrecurring | Residential first mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans held-for-investment | 15 | 14 | |
Fair value gains (losses) on loans | (3) | $ (5) | |
Nonrecurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held-for-sale | 6 | 6 | |
Repossessed assets | 0 | 0 | |
Total assets at fair value | 6 | 6 | |
Nonrecurring | Level 2 | Residential first mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans held-for-investment | 0 | 0 | |
Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held-for-sale | 0 | 0 | |
Repossessed assets | 10 | 10 | |
Total assets at fair value | 25 | 24 | |
Nonrecurring | Level 3 | Residential first mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans held-for-investment | $ 15 | $ 14 | |
Minimum | Measurement input, loss severity | Residential first mortgage loans | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for investment, fair value input (in percentage) | loss_severity_discount_per_loan | 0 | 0.25 | |
Minimum | Measurement input, loss severity | Repossessed assets | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other real estate owned (in percentage) | loss_severity_discount_per_loan | 0 | 0 | |
Maximum | Measurement input, loss severity | Residential first mortgage loans | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for investment, fair value input (in percentage) | loss_severity_discount_per_loan | 0.40 | 0.30 | |
Maximum | Measurement input, loss severity | Repossessed assets | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other real estate owned (in percentage) | loss_severity_discount_per_loan | 1 | 1 | |
Weighted Average | Measurement input, loss severity | Residential first mortgage loans | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for investment, fair value input (in percentage) | loss_severity_discount_per_loan | 0.063 | 0.259 | |
Weighted Average | Measurement input, loss severity | Repossessed assets | Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other real estate owned (in percentage) | loss_severity_discount_per_loan | 0.201 | 0.171 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - Nonrecurring - Level 3 - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ 15 | $ 14 |
Repossessed assets | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ 10 | $ 10 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value Included in Earnings (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Investment securities available-for-sale | $ 2,446 | $ 2,116 |
Investment securities held-to-maturity | 569 | 599 |
Loans held-for-sale | 4,365 | 5,219 |
Loans held-for-investment | 12 | 12 |
Mortgage servicing rights | 223 | 291 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 342 | 426 |
Securitized HFS loans not sold | 2,058 | |
Investment securities available-for-sale | 2,446 | 2,116 |
Investment securities held-to-maturity | 554 | 598 |
Loans held-for-sale | 4,389 | 5,258 |
Loans held-for-investment | 13,795 | 12,129 |
Loans with government guarantees | 814 | 736 |
Mortgage servicing rights | 223 | 291 |
Federal Home Loan Bank stock | 306 | 303 |
Bank owned life insurance | 351 | 349 |
Repossessed assets | 10 | 10 |
Other assets, foreclosure claims | 40 | 45 |
Derivative financial instruments, assets | 277 | 62 |
Liabilities | ||
Federal Home Loan Bank advances | (6,841) | (4,815) |
Long-term debt | (493) | (496) |
DOJ Liability | (35) | (35) |
Contingent consideration | (16) | (10) |
Derivative financial instruments, liabilities | (288) | (18) |
Carrying Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (7,007) | (6,811) |
Carrying Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,138) | (2,353) |
Carrying Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (561) | (633) |
Carrying Value | Government deposits | ||
Liabilities | ||
Deposits | (1,164) | (1,213) |
Carrying Value | Custodial deposits | ||
Liabilities | ||
Deposits | (5,182) | (4,136) |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 342 | 426 |
Securitized HFS loans not sold | 2,058 | |
Investment securities available-for-sale | 2,446 | 2,116 |
Investment securities held-to-maturity | 569 | 599 |
Loans held-for-sale | 4,390 | 5,258 |
Loans held-for-investment | 13,801 | 12,031 |
Loans with government guarantees | 788 | 707 |
Mortgage servicing rights | 223 | 291 |
Federal Home Loan Bank stock | 306 | 303 |
Bank owned life insurance | 351 | 349 |
Repossessed assets | 10 | 10 |
Other assets, foreclosure claims | 40 | 45 |
Derivative financial instruments, assets | 277 | 88 |
Liabilities | ||
Federal Home Loan Bank advances | (6,870) | (4,816) |
Long-term debt | (452) | (462) |
DOJ Liability | (35) | (35) |
Contingent consideration | (16) | (10) |
Derivative financial instruments, liabilities | (288) | (44) |
Estimated Fair Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (6,570) | (6,050) |
Estimated Fair Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,161) | (2,368) |
Estimated Fair Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (575) | (640) |
Estimated Fair Value | Government deposits | ||
Liabilities | ||
Deposits | (1,160) | (1,156) |
Estimated Fair Value | Custodial deposits | ||
Liabilities | ||
Deposits | (5,165) | (4,066) |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 342 | 426 |
Securitized HFS loans not sold | 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 | 0 | 0 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 0 | 0 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
DOJ Liability | 0 | 0 |
Contingent consideration | 0 | 0 |
Derivative financial instruments, liabilities | 0 | 0 |
Estimated Fair Value | Level 1 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Custodial deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securitized HFS loans not sold | 2,058 | |
Investment securities available-for-sale | 2,446 | 2,116 |
Investment securities held-to-maturity | 569 | 599 |
Loans held-for-sale | 4,390 | 5,258 |
Loans held-for-investment | 10 | 10 |
Loans with government guarantees | 788 | 707 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 306 | 303 |
Bank owned life insurance | 351 | 349 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 40 | 45 |
Derivative financial instruments, assets | 108 | 54 |
Liabilities | ||
Federal Home Loan Bank advances | (6,870) | (4,816) |
Long-term debt | (452) | (462) |
DOJ Liability | 0 | 0 |
Contingent consideration | 0 | 0 |
Derivative financial instruments, liabilities | (288) | (43) |
Estimated Fair Value | Level 2 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (6,570) | (6,050) |
Estimated Fair Value | Level 2 | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,161) | (2,368) |
Estimated Fair Value | Level 2 | Wholesale deposits | ||
Liabilities | ||
Deposits | (575) | (640) |
Estimated Fair Value | Level 2 | Government deposits | ||
Liabilities | ||
Deposits | (1,160) | (1,156) |
Estimated Fair Value | Level 2 | Custodial deposits | ||
Liabilities | ||
Deposits | (5,165) | (4,066) |
Estimated Fair Value | Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securitized HFS loans not sold | 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 | 13,791 | 12,021 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 223 | 291 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 10 | 10 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 169 | 34 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
DOJ Liability | (35) | (35) |
Contingent consideration | (16) | (10) |
Derivative financial instruments, liabilities | 0 | (1) |
Estimated Fair Value | Level 3 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Custodial deposits | ||
Liabilities | ||
Deposits | $ 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 | Feb. 24, 2012 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | $ 4,168 | $ 5,073 | ||
Total assets at fair value | 4,377 | 5,231 | ||
Assets, fair value over/(under) UPB | 209 | 158 | ||
Litigation settlement | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Litigation settlement payment amount | $ 118 | |||
Nonperforming | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 9 | 8 | ||
Total assets at fair value | 7 | 7 | ||
Assets, fair value over/(under) UPB | (2) | (1) | ||
Performing | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 4,159 | 5,065 | ||
Total assets at fair value | 4,370 | 5,224 | ||
Assets, fair value over/(under) UPB | 211 | 159 | ||
Loans held-for-sale | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 4,155 | 5,060 | ||
Total assets at fair value | 4,365 | 5,219 | ||
Assets, fair value over/(under) UPB | 210 | 159 | ||
Loans held-for-sale | Nonperforming | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 4 | 3 | ||
Total assets at fair value | 3 | 3 | ||
Assets, fair value over/(under) UPB | (1) | 0 | ||
Loans held-for-sale | Performing | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 4,151 | 5,057 | ||
Total assets at fair value | 4,362 | 5,216 | ||
Assets, fair value over/(under) UPB | 211 | 159 | ||
Loans held-for-investment | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 13 | 13 | ||
Total assets at fair value | 12 | 12 | ||
Assets, fair value over/(under) UPB | (1) | (1) | ||
Loans held-for-investment | Nonperforming | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 5 | 5 | ||
Total assets at fair value | 4 | 4 | ||
Assets, fair value over/(under) UPB | (1) | (1) | ||
Loans held-for-investment | Performing | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Assets, unpaid principal balance (UPB) | 8 | 8 | ||
Total assets at fair value | 8 | 8 | ||
Assets, fair value over/(under) UPB | 0 | 0 | ||
Litigation settlement | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Liabilities, unpaid principal balance (UPB) | (118) | (118) | ||
Long-term debt, fair value | (35) | (35) | ||
Liabilities, fair value over/(under) UPB | 83 | $ 83 | ||
Net gain (loss) on loan sales | Loans held-for-sale | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Changes in fair value, gain (loss) | $ 234 | $ 79 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Segment Information - Financial
Segment Information - Financial Information by Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Summary of Operations | ||
Net interest income | $ 148 | $ 126 |
Provision for credit losses | 14 | 0 |
Net interest income after provision for credit losses | 134 | 126 |
Net gain on loan sales | 90 | 49 |
Loan fees and charges | 26 | 17 |
Loan administration (expense) income | 12 | 11 |
Net return on mortgage servicing rights | 6 | 6 |
Other noninterest income | 23 | 26 |
Total noninterest income | 157 | 109 |
Compensation and benefits | 102 | 87 |
Commissions | 29 | 13 |
Loan processing expense | 20 | 17 |
Other noninterest expense | 84 | 74 |
Total noninterest expense | 235 | 191 |
Income before indirect overhead allocations and income taxes | 56 | 44 |
Indirect overhead allocation Income (expense) | 0 | 0 |
Provision for income taxes | 10 | 8 |
Net income | 46 | 36 |
Intersegment (expense) revenue | 0 | 0 |
Average balances | ||
Loans held-for-sale | 5,248 | 3,266 |
Loans with government guarantees | 811 | 455 |
Loans held-for-investment | 11,823 | 9,164 |
Total assets | 23,413 | 18,438 |
Deposits | 15,795 | 12,906 |
Community Banking | ||
Summary of Operations | ||
Net interest income | 104 | 93 |
Provision for credit losses | 8 | 1 |
Net interest income after provision for credit losses | 96 | 92 |
Net gain on loan sales | 0 | (3) |
Loan fees and charges | 0 | 0 |
Loan administration (expense) income | (1) | (1) |
Net return on mortgage servicing rights | 0 | 0 |
Other noninterest income | 16 | 12 |
Total noninterest income | 15 | 8 |
Compensation and benefits | 27 | 24 |
Commissions | 1 | 0 |
Loan processing expense | 2 | 1 |
Other noninterest expense | 44 | 40 |
Total noninterest expense | 74 | 66 |
Income before indirect overhead allocations and income taxes | 37 | 34 |
Indirect overhead allocation Income (expense) | (9) | (10) |
Provision for income taxes | 6 | 5 |
Net income | 22 | 19 |
Intersegment (expense) revenue | (6) | |
Average balances | ||
Loans held-for-sale | 0 | 0 |
Loans with government guarantees | 0 | 0 |
Loans held-for-investment | 8,898 | 6,234 |
Total assets | 9,387 | 6,589 |
Deposits | 10,434 | 9,983 |
Community Banking | Intersegment Eliminations | ||
Summary of Operations | ||
Intersegment (expense) revenue | 0 | |
Mortgage Originations | ||
Summary of Operations | ||
Net interest income | 42 | 33 |
Provision for credit losses | (3) | 0 |
Net interest income after provision for credit losses | 45 | 33 |
Net gain on loan sales | 90 | 52 |
Loan fees and charges | 17 | 10 |
Loan administration (expense) income | (7) | (4) |
Net return on mortgage servicing rights | 6 | 6 |
Other noninterest income | 1 | 4 |
Total noninterest income | 107 | 68 |
Compensation and benefits | 31 | 24 |
Commissions | 28 | 12 |
Loan processing expense | 10 | 5 |
Other noninterest expense | 26 | 19 |
Total noninterest expense | 95 | 60 |
Income before indirect overhead allocations and income taxes | 57 | 41 |
Indirect overhead allocation Income (expense) | (12) | (10) |
Provision for income taxes | 9 | 7 |
Net income | 36 | 24 |
Intersegment (expense) revenue | 1 | |
Average balances | ||
Loans held-for-sale | 5,248 | 3,266 |
Loans with government guarantees | 811 | 455 |
Loans held-for-investment | 2,895 | 2,901 |
Total assets | 9,817 | 7,612 |
Deposits | 0 | 0 |
Mortgage Originations | Intersegment Eliminations | ||
Summary of Operations | ||
Intersegment (expense) revenue | 3 | |
Mortgage Servicing | ||
Summary of Operations | ||
Net interest income | 4 | 3 |
Provision for credit losses | 0 | 0 |
Net interest income after provision for credit losses | 4 | 3 |
Net gain on loan sales | 0 | 0 |
Loan fees and charges | 9 | 7 |
Loan administration (expense) income | 36 | 29 |
Net return on mortgage servicing rights | 0 | 0 |
Other noninterest income | 0 | 0 |
Total noninterest income | 45 | 36 |
Compensation and benefits | 10 | 6 |
Commissions | 0 | 0 |
Loan processing expense | 7 | 10 |
Other noninterest expense | 19 | 15 |
Total noninterest expense | 36 | 31 |
Income before indirect overhead allocations and income taxes | 13 | 8 |
Indirect overhead allocation Income (expense) | (5) | (5) |
Provision for income taxes | 2 | 0 |
Net income | 6 | 3 |
Intersegment (expense) revenue | 8 | |
Average balances | ||
Loans held-for-sale | 0 | 0 |
Loans with government guarantees | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Total assets | 48 | 56 |
Deposits | 4,777 | 2,528 |
Mortgage Servicing | Intersegment Eliminations | ||
Summary of Operations | ||
Intersegment (expense) revenue | 6 | |
Other | ||
Summary of Operations | ||
Net interest income | (2) | (3) |
Provision for credit losses | 9 | (1) |
Net interest income after provision for credit losses | (11) | (2) |
Net gain on loan sales | 0 | 0 |
Loan fees and charges | 0 | 0 |
Loan administration (expense) income | (16) | (13) |
Net return on mortgage servicing rights | 0 | 0 |
Other noninterest income | 6 | 10 |
Total noninterest income | (10) | (3) |
Compensation and benefits | 34 | 33 |
Commissions | 0 | 1 |
Loan processing expense | 1 | 1 |
Other noninterest expense | (5) | 0 |
Total noninterest expense | 30 | 35 |
Income before indirect overhead allocations and income taxes | (51) | (40) |
Indirect overhead allocation Income (expense) | 26 | 25 |
Provision for income taxes | (7) | (4) |
Net income | (18) | (11) |
Intersegment (expense) revenue | (3) | |
Average balances | ||
Loans held-for-sale | 0 | 0 |
Loans with government guarantees | 0 | 0 |
Loans held-for-investment | 30 | 29 |
Total assets | 4,161 | 4,181 |
Deposits | $ 584 | 395 |
Other | Intersegment Eliminations | ||
Summary of Operations | ||
Intersegment (expense) revenue | $ (9) |
Recently Issued Accounting Pr_4
Recently Issued Accounting Pronouncements - Adoption of New Accounting Standards (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Retained earnings | $ (323) | $ (303) |
Recently Issued Accounting Pr_5
Recently Issued Accounting Pronouncements - Schedule of Adoption of ASC 326 (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | |||||
Allowance for loan losses | $ 132 | $ 107 | $ 107 | $ 127 | $ 128 |
Liabilities: | |||||
Reserve for unfunded commitments | 3 | ||||
As Reported Under ASC 326 | |||||
Assets | |||||
Allowance for loan losses | 130 | ||||
Liabilities: | |||||
Reserve for unfunded commitments | 10 | ||||
Impact of ASC 326 Adoption | |||||
Assets | |||||
Allowance for loan losses | 23 | ||||
Liabilities: | |||||
Reserve for unfunded commitments | $ 7 |
Uncategorized Items - fbc202003
Label | Element | Value |
Cumulative Effect, Period Of Adoption, Adjustment [Member] | Retained Earnings [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (23,000,000) |
Accounting Standards Update 2016-02 [Member] | Cumulative Effect, Period Of Adoption, Adjustment [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (23,000,000) |