Derivative Financial Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Derivative Instruments Notional And Fair Values

The following tables present the notional amount and estimated fair value of derivative instruments on a gross basis as of December 31:



	2019						2018
	Notional Amount		Estimated Fair Value				Notional Amount		Estimated Fair Value
	Notional Amount		Gain⁽¹⁾		Loss⁽¹⁾		Notional Amount		Gain⁽¹⁾		Loss⁽¹⁾
	(In millions)
Derivatives in fair value hedging relationships:
Interest rate swaps	$	2,900					$	3,231
Derivatives in cash flow hedging relationships:
Interest rate swaps	17,250						8,750
Interest rate floors ⁽²⁾	6,750		208				3,250		72
Total derivatives designated as hedging instruments	$	26,900	$	208			$	15,231	$	72
Derivatives not designated as hedging instruments:
Interest rate swaps	$	68,075	$	376	$	164	$	49,737	$	193	$	237
Interest rate options	11,347		27		9		7,178		29		20
Interest rate futures and forward commitments	27,324		10		11		7,961		4		9
Other contracts	10,276		48		58		7,287		72		74
Total derivatives not designated as hedging instruments	$	117,022	$	461	$	242	$	72,163	$	298	$	340
Total derivatives	$	143,922	$	669	$	242	$	87,394	$	370	$	340

Total gross derivative instruments, before netting			$	669	$	242			$	370	$	340
Less: Legally enforceable master netting agreements			105		105				108		108
Less: Cash collateral received/posted			229		90				135		71
Total gross derivative instruments, after netting ⁽³⁾			$	335	$	47			$	127	$	161

_________


(1)	Derivatives in a gain position are recorded as other assets and derivatives in a loss position are recorded as other liabilities on the consolidated balance sheets. There is no fair value presented for contracts that are characterized as settled daily.


(2)	Estimated fair value includes premium and change in fair value of the interest rate floors.

(3)

The gain amounts, which are not collateralized with cash or other assets or reserved for, represent the net credit risk on all trading and other derivative positions. Financial instruments posted of $24 million were not offset in the consolidated balance sheets at both December 31, 2019 and 2018.

Schedule Of Effect Of Hedging Derivative Instruments On Statements Of Operations

The following tables present the effect of hedging derivative instruments on the consolidated statements of income and the total amounts for the respective line items affected for the years ended December 31:



	2019
	Interest Income						Interest Expense			Non-interest Expense
	Debt securities-taxable			Loans, including fees			Long-term borrowings			Other
	(In millions)
Total amounts presented in the consolidated statements of income	$	643		$	3,866		$	351		$	927

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	—		$	—		$	(14	)	$	—
Recognized on derivatives	(2		)	—			92			—
Recognized on hedged items	2			—			(92		)	—
Net income (expense) recognized on fair value hedges	$	—		$	—		$	(14	)	$	—

Gains/(losses) on cash flow hedging relationships: ⁽¹⁾
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income ⁽²⁾	$	—		$	(24	)	$	—		$	—
Net income (expense) recognized on cash flow hedges ⁽²⁾	$	—		$	(24	)	$	—		$	—



	2018
	Interest Income					Interest Expense			Non-interest Expense
	Debt securities-taxable			Loans, including fees		Long-term borrowings			Other
	(In millions)
Total amounts presented in the consolidated statements of income	$	625		$	3,613	$	322		$	963

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	(1	)	$	—	$	(15	)	$	—
Recognized on derivatives	4			—		1			—
Recognized on hedged items	(4		)	—		(1		)	—
Net income (expense) recognized on fair value hedges	$	(1	)	$	—	$	(15	)	$	—

Gains/(losses) on cash flow hedging relationships: ⁽¹⁾
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income ⁽²⁾	$	—		$	12	$	—		$	—
Net income (expense) recognized on cash flow hedges ⁽²⁾	$	—		$	12	$	—		$	—



	2017
	Interest Income					Interest Expense		Non-interest Expense
	Debt securities-taxable			Loans, including fees		Long-term borrowings		Other
	(In millions)
Total amounts presented in the consolidated statements of income	$	596		$	3,228	$	212	$	952

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	(4	)	$	—	$	2	$	—
Recognized on derivatives	—			—		—		(19		)
Recognized on hedged items	—			—		—		20
Net income (expense) recognized on fair value hedges	$	(4	)	$	—	$	2	$	1

Gains/(losses) on cash flow hedging relationships: ⁽¹⁾
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income ⁽²⁾	$	—		$	86	$	—	$	—
Net income (expense) recognized on cash flow hedges ⁽²⁾	$	—		$	86	$	—	$	—

____

(1) See Note 15 for gain or (loss) recognized for cash flow hedges in AOCI.

(2) Pre-tax

Schedule of Fair Value Hedging Basis Adjustments

The following tables present the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of December 31:



	2019						2018
	Hedged Items Currently Designated						Hedged Items Currently Designated
	Carrying Amount of Assets/(Liabilities)			Hedge Accounting Basis Adjustment			Carrying Amount of Assets/(Liabilities)			Hedge Accounting Basis Adjustment
	(In millions)						(In millions)
Debt securities available for sale	$	—		$	—		$	85		$	—
Long-term borrowings	(2,954		)	(49		)	(3,103		)	50

Schedule Of Gains (Losses) Recognized In Income Related To Derivatives Not Designated As Hedging Instruments

The following table presents the location and amount of gain or (loss) recognized in income on derivatives not designated as hedging instruments in the consolidated statements of income for the years ended December 31:



Derivatives Not Designated as Hedging Instruments	2019			2018			2017
	(In millions)
Capital markets income:
Interest rate swaps	$	13		$	19		$	11
Interest rate options	23			28			28
Interest rate futures and forward commitments	10			3			10
Other contracts	(1		)	5			(10		)
Total capital markets income	45			55			39
Mortgage income:
Interest rate swaps	68			(12		)	2
Interest rate options	(1		)	—			(7		)
Interest rate futures and forward commitments	5			(8		)	(3		)
Total mortgage income	72			(20		)	(8		)
	$	117		$	35		$	31