Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 08, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-16577 | |
Entity Registrant Name | Flagstar Bancorp, Inc. | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 38-3150651 | |
Entity Address, Address Line One | 5151 Corporate Drive, | |
Entity Address, City or Town | Troy, | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48098-2639 | |
City Area Code | 248 | |
Local Phone Number | 312-2000 | |
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) | 52,564,331 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001033012 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash | $ 194 | $ 220 |
Interest-earning deposits | 86 | 206 |
Total cash and cash equivalents | 280 | 426 |
Investment securities available-for-sale | 2,165 | 2,116 |
Investment securities held-to-maturity | 440 | 598 |
Loans held-for-sale ($5,349 and $5,219 measured at fair value, respectively) | 5,372 | 5,258 |
Loans held-for-investment ($14 and $12 measured at fair value, respectively) | 16,476 | 12,129 |
Loans with government guarantees | 2,500 | 736 |
Less: allowance for loan losses | (255) | (107) |
Total loans held-for-investment and loans with government guarantees, net | 18,721 | 12,758 |
Mortgage servicing rights | 323 | 291 |
Federal Home Loan Bank stock | 377 | 303 |
Premises and equipment, net | 410 | 416 |
Goodwill and intangible assets | 160 | 170 |
Other assets | 1,228 | 930 |
Total assets | 29,476 | 23,266 |
Liabilities and Stockholders’ Equity | ||
Noninterest bearing deposits | 9,429 | 5,467 |
Interest bearing deposits | 10,516 | 9,679 |
Total deposits | 19,945 | 15,146 |
Short-term Federal Home Loan Bank advances and other | 2,226 | 4,165 |
Long-term Federal Home Loan Bank advances | 1,200 | 650 |
Other long-term debt | 493 | 496 |
Other liabilities ($35 and $35 measured at fair value, respectively) | 3,417 | 1,021 |
Total liabilities | 27,281 | 21,478 |
Stockholders’ Equity | ||
Common stock $0.01 par value, 80,000,000 and 80,000,000 shares authorized; 57,150,470 and 56,631,236 shares issued and outstanding, respectively | 1 | 1 |
Additional paid in capital | 1,493 | 1,483 |
Accumulated other comprehensive income | 46 | 1 |
Retained earnings | 655 | 303 |
Total stockholders’ equity | 2,195 | 1,788 |
Total liabilities and stockholders’ equity | 29,476 | 23,266 |
Other liabilities, fair value | $ 35 | $ 35 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Loans held-for-sale, fair value | $ 5,349 | $ 5,219 |
Loans held-for-investment, fair value | 14 | 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 issued (in shares) | 57,150,470 | 56,631,236 |
Common stock, shares outstanding (in shares) | 57,150,470 | 56,631,236 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest Income | ||||
Loans | $ 190 | $ 185 | $ 551 | $ 517 |
Investment securities | 16 | 17 | 56 | 61 |
Interest-earning deposits and other | 0 | 1 | 1 | 3 |
Total interest income | 206 | 203 | 608 | 581 |
Interest Expense | ||||
Deposits | 16 | 38 | 69 | 102 |
Short-term Federal Home Loan Bank advances and other | 2 | 10 | 16 | 44 |
Long-term Federal Home Loan Bank advances | 3 | 2 | 9 | 4 |
Other long-term debt | 5 | 7 | 18 | 21 |
Total interest expense | 26 | 57 | 112 | 171 |
Net interest income | 180 | 146 | 496 | 410 |
Provision for credit losses | 32 | 1 | 148 | 18 |
Net interest income after provision for credit losses | 148 | 145 | 348 | 392 |
Noninterest Income | ||||
Net gain on loan sales | 346 | 110 | 739 | 234 |
Loan fees and charges | 45 | 29 | 112 | 70 |
Net return on mortgage servicing rights | 12 | (2) | 10 | 9 |
Loan administration income | 26 | 5 | 59 | 22 |
Deposit fees and charges | 8 | 10 | 24 | 28 |
Other noninterest income | 15 | 19 | 44 | 85 |
Total noninterest income | 452 | 171 | 988 | 448 |
Noninterest Expense | ||||
Compensation and benefits | 123 | 98 | 341 | 275 |
Occupancy and equipment | 47 | 40 | 132 | 118 |
Commissions | 72 | 38 | 162 | 76 |
Loan processing expense | 24 | 22 | 69 | 60 |
Legal and professional expense | 9 | 6 | 20 | 18 |
Federal insurance premiums | 6 | 5 | 19 | 14 |
Intangible asset amortization | 3 | 3 | 10 | 11 |
Other noninterest expense | 21 | 26 | 84 | 71 |
Total noninterest expense | 305 | 238 | 837 | 643 |
Income before income taxes | 295 | 78 | 499 | 197 |
Provision for income taxes | 73 | 15 | 115 | 37 |
Net income | $ 222 | $ 63 | $ 384 | $ 160 |
Net income per share | ||||
Basic (in dollars per share) | $ 3.90 | $ 1.12 | $ 6.76 | $ 2.83 |
Diluted (in dollars per share) | $ 3.88 | $ 1.11 | $ 6.71 | $ 2.80 |
Weighted average shares outstanding | ||||
Basic (in shares) | 57,032,746 | 56,484,499 | 56,827,171 | 56,607,944 |
Diluted (in shares) | 57,379,809 | 57,110,796 | 57,231,689 | 57,252,540 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 222,000,000 | $ 63,000,000 | $ 384,000,000 | $ 160,000,000 |
Other comprehensive income, net of tax | ||||
Investment securities | 0 | 13,000,000 | 55,000,000 | 52,000,000 |
Derivatives and hedging activities | 0 | 0 | (10,000,000) | 0 |
Other comprehensive income, net of tax | 0 | 13,000,000 | 45,000,000 | 52,000,000 |
Comprehensive income | $ 222,000,000 | $ 76,000,000 | $ 429,000,000 | $ 212,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | |
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 | 160 | 160 | ||||||
Total other comprehensive income | 52 | 52 | ||||||
Shares issued from Employee Stock Purchase Plan (in shares) | 84,036 | |||||||
Shares issued from the Employee Stock Purchase Plan | 0 | |||||||
Bancorp Dividends Declared and paid (in shares) | 280 | |||||||
Bancorp Dividends Declared and paid | (7) | (7) | ||||||
Stock-based compensation (in shares) | 194,266 | |||||||
Stock-based compensation | 9 | 9 | ||||||
Repurchase of shares (in shares) | [1] | (1,517,705) | ||||||
Repurchase of shares | [1] | (50) | (50) | |||||
Ending balance (in shares) at Sep. 30, 2019 | 56,510,341 | |||||||
Ending balance at Sep. 30, 2019 | 1,734 | $ 1 | 1,481 | 5 | 247 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 63 | |||||||
Total other comprehensive income | 13 | |||||||
Ending balance (in shares) at Sep. 30, 2019 | 56,510,341 | |||||||
Ending balance at Sep. 30, 2019 | 1,734 | $ 1 | 1,481 | 5 | 247 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 56,631,236 | |||||||
Beginning balance at Dec. 31, 2019 | 1,788 | $ (23) | $ 1 | 1,483 | 1 | 303 | $ (23) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 384 | 384 | ||||||
Total other comprehensive income | 45 | 45 | ||||||
Shares issued from Employee Stock Purchase Plan (in shares) | 149,789 | |||||||
Shares issued from the Employee Stock Purchase Plan | 0 | |||||||
Bancorp Dividends Declared and paid (in shares) | 583 | |||||||
Bancorp Dividends Declared and paid | (9) | (9) | ||||||
Stock-based compensation (in shares) | 368,862 | |||||||
Stock-based compensation | 10 | 10 | ||||||
Repurchase of shares | [1] | 0 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 57,150,470 | |||||||
Ending balance at Sep. 30, 2020 | 2,195 | $ 1 | 1,493 | 46 | 655 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 222 | |||||||
Total other comprehensive income | 0 | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 57,150,470 | |||||||
Ending balance at Sep. 30, 2020 | $ 2,195 | $ 1 | $ 1,493 | $ 46 | $ 655 | |||
[1] | Includes dividend reinvestment shares |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.05 | $ 0.04 |
Dividends paid (in dollars per share) | $ 0.05 | $ 0.04 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Operating Activities | |||
Net cash used in operating activities | $ (5,991,000,000) | $ (15,700,000,000) | |
Investing Activities | |||
Proceeds from sale of AFS securities including loans that have been securitized | 6,175,000,000 | 15,631,000,000 | |
Collection of principal on investment securities AFS | 395,000,000 | 129,000,000 | |
Purchase of investment securities AFS and other | (359,000,000) | (39,000,000) | |
Collection of principal on investment securities HTM | 158,000,000 | 68,000,000 | |
Proceeds received from the sale of LHFI | 433,000,000 | 167,000,000 | |
Net closings, purchases, and principal repayments of LHFI | (4,794,000,000) | (3,575,000,000) | |
Acquisition of premises and equipment, net of proceeds | (44,000,000) | (48,000,000) | |
Net purchase of FHLB stock | (74,000,000) | 0 | |
Proceeds from the sale of MSRs | 42,000,000 | 56,000,000 | |
Other, net | (11,000,000) | (8,000,000) | |
Net cash provided by investing activities | 1,921,000,000 | 12,381,000,000 | |
Financing Activities | |||
Net change in deposit accounts | 4,799,000,000 | 3,365,000,000 | |
Net change in short-term FHLB borrowings and other short-term debt | (1,939,000,000) | (913,000,000) | |
Proceeds from increases in FHLB long-term advances and other debt | 550,000,000 | 550,000,000 | |
Repayment of FHLB long-term advances | 0 | (50,000,000) | |
Repayment of long-term debt | (3,000,000) | 0 | |
Net receipt of payments of loans serviced for others | 531,000,000 | 366,000,000 | |
Common stock repurchase | 0 | (50,000,000) | |
Dividends declared and paid | (9,000,000) | (7,000,000) | |
Other | (8,000,000) | 14,000,000 | |
Net cash provided by financing activities | 3,921,000,000 | 3,275,000,000 | |
Net change in cash, cash equivalents and restricted cash | [1] | (149,000,000) | (44,000,000) |
Beginning cash, cash equivalents and restricted cash | [1] | 456,000,000 | 432,000,000 |
Ending cash, cash equivalents and restricted cash | [1] | 307,000,000 | 388,000,000 |
Supplemental disclosure of cash flow information | |||
Non-cash reclassification of LHFI to LHFS | 445,000,000 | 101,000,000 | |
Non-cash reclassification of LHFS to securitized HFS loans | 6,183,000,000 | 15,198,000,000 | |
MSRs resulting from sale or securitization of loans | 209,000,000 | 203,000,000 | |
Operating section supplemental disclosures | |||
Proceeds from sales of LHFS | 30,332,000,000 | 7,714,000,000 | |
Closings, premium paid and purchase of LHFS, net of principal repayments | $ (35,603,000,000) | $ (23,249,000,000) | |
[1] | For further information on restricted cash, see Note 8 - Derivatives. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 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 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, which is available on our website, flagstar.com, and on the SEC website at sec.gov. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The following table presents our AFS and HTM investment securities: Amortized Cost Gross Unrealized Gross Unrealized Fair Value (Dollars in millions) September 30, 2020 Available-for-sale securities Agency - Commercial $ 1,126 $ 45 $ — $ 1,171 Agency - Residential 806 31 — 837 Corporate debt obligations 76 1 — 77 Municipal obligations 29 1 — 30 Other MBS 49 — — 49 Certificate of deposits 1 — — 1 Total available-for-sale securities (1) $ 2,087 $ 78 $ — $ 2,165 Held-to-maturity securities Agency - Commercial $ 221 $ 8 $ — $ 229 Agency - Residential 219 10 — 229 Total held-to-maturity securities (1) $ 440 $ 18 $ — $ 458 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 September 30, 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 which represented 94 percent of our AFS portfolio as of September 30, 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 OCI. We had no unrealized credit losses as of September 30, 2020 and December 31, 2019. We separately evaluate our HTM debt securities for any credit losses. As of September 30, 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. 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 $6 million at both September 30, 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 $359 million of AFS securities, which were comprised of U.S. government sponsored agency MBS, certificate of deposits, and corporate debt obligations during the nine months ended September 30, 2020. We did not purchase any AFS securities during the three months ended September 30, 2020. We purchased $16 million and $39 million of AFS securities, which were comprised of U.S. government sponsored agency MBS, certificate of deposits, and corporate debt obligations during the three and nine months ended September 30, 2019, respectively. In addition, we retained $18 million of passive interests in our own private MBS during the nine months ended September 30, 2020. We did not retain any interest in our own private MBS during the three months ended September 30, 2020 or both the three and nine months ended September 30, 2019. There were no sales of AFS securities during both the three and nine months ended September 30, 2020. There were no sales of AFS securities during the three months ended September 30, 2019, and $432 million in sales of AFS securities during the nine months ended September 30, 2019. These sales resulted in a gain of $7 million, reported in other noninterest income in the Consolidated Statements of Operations. These sales did not include 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 and nine months ended September 30, 2020 and September 30, 2019. The following table summarizes the unrealized loss positions on available-for-sale and held-to-maturity investment securities, by duration of the unrealized loss: Unrealized Loss Position with Unrealized Loss Position with Fair Value Number of Securities Unrealized Loss Fair Number of Unrealized (Dollars in millions) September 30, 2020 Available-for-sale securities Agency - Commercial $ 3 1 $ — $ 4 1 $ — Municipal obligations $ — — $ — $ 6 1 $ — Corporate debt obligations $ — — $ — $ 13 4 $ — Other mortgage-backed securities $ — — $ — $ — 1 $ — Held-to-maturity securities Agency - Residential $ — — $ — $ 5 2 $ — 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 Fair Weighted Average Amortized Fair Weighted Average (Dollars in millions) September 30, 2020 Due in one year or less $ 5 $ 5 2.24 % $ — $ — — % Due after one year through five years 8 8 2.71 % 8 8 2.52 % Due after five years through 10 years 108 111 4.23 % 8 8 2.35 % Due after 10 years 1,966 2,041 2.38 % 424 442 2.34 % Total $ 2,087 $ 2,165 $ 440 $ 458 We pledge investment securities, primarily agency collateralized and municipal taxable mortgage obligations, to collateralize lines of credit and/or borrowings. At September 30, 2020 and December 31, 2019, we had pledged investment securities of $176 million and $874 million, respectively. |
Loans Held-for-Sale
Loans Held-for-Sale | 9 Months Ended |
Sep. 30, 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 $5.4 billion and $5.3 billion at September 30, 2020 and December 31, 2019, respectively. For the three and nine months ended September 30, 2020 we had net gain on loan sales associated with LHFS of $344 million and $737 million as compared to $110 million and $232 million for the three and nine months ended September 30, 2019. |
Loans Held-for-Investment
Loans Held-for-Investment | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment We classify loans that we have the intent and ability to hold for the foreseeable future or until maturity as LHFI. 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 $41.0 million at September 30, 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: September 30, 2020 December 31, 2019 (Dollars in millions) Consumer loans Residential first mortgage $ 2,472 $ 3,154 Home equity 924 1,024 Other 973 729 Total consumer loans 4,369 4,907 Commercial loans Commercial real estate 2,996 2,828 Commercial and industrial 1,520 1,634 Warehouse lending 7,591 2,760 Total commercial loans 12,107 7,222 Total loans held-for-investment $ 16,476 $ 12,129 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: Nine Months Ended September 30, 2020 2019 (Dollars in millions) Loans Sold (1) Performing loans $ 436 $ 166 Total loans sold $ 436 $ 166 Net gain associated with loan sales (2) $ 3 $ 2 Loans Purchased Home equity $ — $ 199 Other consumer (3) 63 51 Total loans purchased $ 63 $ 250 Premium associated with loans purchased $ — $ 9 (1) Upon a change in our intent, the loans were transferred to LHFS and subsequently sold. (2) Recorded in net gain on loan sales on Consolidated Statements of Operations. (3) Does not include point of sale flow consumer loans. We have pledged certain LHFI, LHFS, and loans with government guarantees to collateralize lines of credit and/or borrowings with the FHLB of Indianapolis and the FRB of Chicago. At September 30, 2020 we had pledged loans of $10.7 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 September 30, 2020, we estimated losses over a two-year reasonable and supportable forecast period using macroeconomic scenarios before reverting economic variables over a one-year period to their long-term historical averages on a straight-line basis. As of September 30, 2020, we utilized the Moody’s September scenarios in our forecast: a growth forecast, weighted at 30 percent; a baseline forecast, weighted at 40 percent; and an adverse forecast, weighted at 30 percent. The resulting composite forecast for the third quarter of 2020 was roughly equivalent to the scenario used in the second quarter 2020. Unemployment ends the year at 10 percent and recovers only slightly in 2021. GDP recovers only slightly by the end of the year from current levels and does not return to near pre-COVID level until 2024. HPI decreases 2 percent from mid-2020 through 2021. The following table presents changes in the allowance for loan losses, by class of loan: Residential Home Equity Other Commercial Commercial Warehouse Total (Dollars in millions) Three Months Ended September 30, 2020 Beginning balance $ 60 $ 28 $ 34 $ 83 $ 23 $ 1 $ 229 Provision (6) 1 4 6 19 4 28 Charge-offs (2) (1) (1) — — — (4) Recoveries — 1 1 — — — 2 Ending allowance balance $ 52 $ 29 $ 38 $ 89 $ 42 $ 5 $ 255 Three Months Ended September 30, 2019 Beginning balance $ 26 $ 16 $ 5 $ 35 $ 23 $ 5 $ 110 Provision (benefit) 2 — 3 (2) (2) — 1 Charge-offs (1) (1) (2) — — — (4) Recoveries 1 1 — — 1 — 3 Ending allowance balance $ 28 $ 16 $ 6 $ 33 $ 22 $ 5 $ 110 Nine Months Ended September 30, 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 10 3 24 65 26 4 132 Charge-offs (5) (3) (4) — — — (12) Recoveries — 3 2 — — — 5 Ending allowance balance $ 52 $ 29 $ 38 $ 89 $ 42 $ 5 $ 255 Nine Months Ended September 30, 2019 Beginning balance $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Provision (benefit) (8) — 8 (15) 34 (1) 18 Charge-offs (3) (1) (5) — (31) — (40) Recoveries 1 2 — — 1 — 4 Ending allowance balance $ 28 $ 16 $ 6 $ 33 $ 22 $ 5 $ 110 (1) Includes loans with government guarantees. The allowance for loan losses was $255 million at September 30, 2020 and $110 million at September 30, 2019. The increase in the allowance is reflective of the adoption of CECL, changes in the economic forecasts used in the ACL models as a result of the ongoing COVID-19 pandemic and credit downgrades largely attributed to challenging economic conditions being faced by certain of our borrowers due to the pandemic. 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. Beginning 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 sets forth the LHFI aging analysis of past due and current loans: 30-59 Days 60-89 Days 90 Days or Total Current Total LHFI (3) (4) (Dollars in millions) September 30, 2020 Consumer loans Residential first mortgage $ 5 $ 3 $ 30 $ 38 $ 2,434 $ 2,472 Home equity 1 — 4 5 919 924 Other 3 1 2 6 967 973 Total consumer loans 9 4 36 49 4,320 4,369 Commercial loans Commercial real estate — — — — 2,996 2,996 Commercial and industrial — — 10 10 1,510 1,520 Warehouse lending — — — — 7,591 7,591 Total commercial loans — — 10 10 12,097 12,107 Total loans (2) $ 9 $ 4 $ 46 $ 59 $ 16,417 $ 16,476 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 $8 million and $4 million of past due loans accounted for under the fair value option as of September 30, 2020 and December 31, 2019, respectively. (3) Collateral dependent loans totaled $74 million at September 30, 2020 and $54 million at December 31, 2019, respectively. The majority of these loans are secured by real estate. (4) The interest income recognized on impaired loans was $2 million and less than $1 million at September 30, 2020 and December 31, 2019, respectively. Interest income is recognized on nonaccrual loans using a cash basis method. The interest that would have been accrued on impaired loans was $2 million and less than $1 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 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 Consolidated Statements of Financial Condition and was $25 million as of September 30, 2020, compared to $3 million as of December 31, 2019. The increase in the reserve is reflective of the adoption of CECL which required us to record an allowance for our estimate of lifetime losses and an increase due to changes in the economic forecasts 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. 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 offered our consumer and commercial customers principal and interest payment deferrals and extensions. We considered these programs in the context of whether or not the short-term modifications of these loans would constitute a 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. As a result, we have determined that these loans are not TDRs. The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) September 30, 2020 Consumer loans Residential first mortgage $ 20 $ 7 $ 27 Home equity 14 2 16 Commercial Real Estate 5 — 5 Total TDRs (1)(2) $ 39 $ 9 $ 48 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 September 30, 2020 and December 31, 2019, respectively. (2) Includes $2 million of TDR loans accounted for under the fair value option at September 30, 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 September 30, 2020 Residential first mortgages 1 $ — $ — Home equity (2)(3) 1 — — Consumer 1 — — Total TDR loans 3 $ — $ — Three Months Ended September 30, 2019 Residential first mortgages 4 $ 1 $ 1 Total TDR loans 4 $ 1 $ 1 Nine Months Ended September 30, 2020 Residential first mortgages 6 $ 1 $ 1 Home equity (2)(3) 3 — — Consumer 2 — — Commercial Real Estate 1 5 5 Total TDR loans 12 $ 6 $ 6 Nine Months Ended September 30, 2019 Residential first mortgages 6 $ 1 $ 1 Home equity (2)(3) 4 1 1 Total TDR loans 10 $ 2 $ 2 (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification UPB reflects write downs. (3) Includes loans carried at the fair value option. There were no loans modified in the previous 12 months that subsequently defaulted during the three and nine months ended September 30, 2020 or September 30, 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. 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: Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total December 31, 2019 Term Loans Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential First Mortgage Pass $ 256 $ 630 $ 272 $ 348 $ 308 $ 483 $ 105 $ 8 $ 2,410 $ 3,107 Watch — 1 — 2 — 16 — — 19 23 Substandard — 4 6 2 — 17 — 1 30 15 Home Equity Pass 6 37 16 7 2 12 799 29 908 1,002 Watch — — — — — 12 — — 12 16 Substandard — — — — — 1 1 — 2 3 Other Consumer Pass 226 345 165 4 2 7 218 5 972 727 Watch — — — — — — — — — 1 Substandard — — 1 — — — — — 1 1 Total Consumer Loans (1) $ 488 $ 1,017 $ 460 $ 363 $ 312 $ 548 $ 1,123 $ 43 $ 4,354 $ 4,895 (1) Excludes loans carried under the fair value option The following table presents the amortized cost in residential and consumer loans based on credit scores: Revolving Loans Converted to Term Loans Amortized Cost Basis FICO Band Revolving Loans Amortized Cost Basis Total Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential First Mortgage >750 $ 151 $ 323 $ 141 $ 241 $ 228 $ 272 $ 61 $ 2 $ 1,419 700-750 79 212 106 95 73 148 30 5 748 <700 26 100 31 16 7 96 14 2 292 Home Equity >750 2 11 6 3 — 7 358 4 391 700-750 2 14 5 3 1 9 319 14 367 <700 2 12 5 1 1 9 123 11 164 Other Consumer >750 160 220 87 1 — 5 200 5 678 700-750 61 114 65 3 2 2 18 — 265 <700 5 11 14 — — — — — 30 Total Consumer Loans (1) $ 488 $ 1,017 $ 460 $ 363 $ 312 $ 548 $ 1,123 $ 43 $ 4,354 (1) Excludes loans carried under the fair value option 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: Revolving Loans Converted to Term Loans Amortized Cost Basis LTV Band Revolving Loans Amortized Cost Basis Total Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential first mortgage >90 $ 53 $ 286 $ 142 $ 39 $ 3 $ 21 $ — $ — $ 544 71-90 122 213 77 123 82 267 — — 884 55-70 64 78 29 99 121 140 — — 531 <55 17 58 30 91 102 88 105 9 500 Home Equity >90 — — — 2 1 11 1 — 15 71-90 4 29 12 4 1 10 612 21 693 <=70 2 8 4 1 — 4 187 8 214 Total (1) $ 262 $ 672 $ 294 $ 359 $ 310 $ 541 $ 905 $ 38 $ 3,381 (1) Excludes loans carried under the fair value option 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 December 31, 2019 Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Commercial Loans (Dollars in million) Commercial real estate Pass $ 249 $ 978 $ 466 $ 452 $ 325 $ 239 $ (1) $ — $ 2,708 $ 2,794 Watch 20 14 81 44 28 31 — — 218 24 Special mention 4 9 16 — 10 — — — 39 5 Substandard — 3 3 25 — — — — 31 5 Commercial and industrial Pass 212 494 185 188 107 116 20 — 1,322 1,533 Watch 2 46 26 25 — 1 — — 100 72 Special mention 2 13 13 17 — 5 — — 50 24 Substandard 21 1 16 10 — — — — 48 5 Warehouse Pass — — — — — — 7,381 — 7,381 2,556 Watch — — — — — — 195 — 195 189 Special mention — — — — — — 15 — 15 15 Substandard — — — — — — — — — — Total commercial loans $ 510 $ 1,558 $ 806 $ 761 $ 470 $ 392 $ 7,610 $ — $ 12,107 $ 7,222 |
Loans with Government Guarantee
Loans with Government Guarantees | 9 Months Ended |
Sep. 30, 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. When a GNMA loan is due, but unpaid, for three consecutive months (typically referred to as 90 days past due) the loan is required to be re-recognized on the balance sheet by the MSR owner. These loans are recorded in loans with government guarantees, and the liability to repurchase the loans is recorded in other liabilities on the consolidated statements of financial condition. This resulted in $1.8 billion of repurchase options as of September 30, 2020, a $1.7 billion increase from December 31, 2019. 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 $22 million and $45 million, at September 30, 2020 and December 31, 2019, respectively. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 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 September 30, 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 - Fair Value Measurements, for additional information. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Balance at beginning of period $ 261 $ 316 $ 291 $ 290 Additions from loans sold with servicing retained 85 39 209 203 Reductions from sales — (12) (46) (57) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (25) (30) (74) (60) Changes in estimates of fair value due to interest rate risk (1) (2) 2 (28) (57) (91) Fair value of MSRs at end of period $ 323 $ 285 $ 323 $ 285 (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: September 30, 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 7.61 % $ 316 $ 310 5.34 % $ 284 $ 280 Constant prepayment rate 11.36 % $ 300 $ 279 10.59 % $ 271 $ 257 Weighted average cost to service per loan $ 81.68 $ 320 $ 316 $ 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 30 $ 25 $ 75 $ 70 Decrease in MSR fair value due to pay-offs, pay-downs, (25) (30) (74) (60) Changes in fair value due to interest rate risk 2 (28) (57) (91) Gain on MSR derivatives (2) 4 31 68 92 Net transaction costs 1 — (2) (2) Total return (loss) included in net return on mortgage servicing rights $ 12 $ (2) $ 10 $ 9 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 33 $ 27 $ 94 $ 77 Charges on subserviced custodial balances (2) (3) (20) (26) (50) Other servicing charges (4) (2) (9) (5) Total income on mortgage loans subserviced, included in loan administration $ 26 $ 5 $ 59 $ 22 (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 | 9 Months Ended |
Sep. 30, 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 our 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 and residential first mortgage loans held for investment 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 on the Consolidated Statement of Financial Condition and reclassified into interest expense in the same period in which the hedge transaction is recognized in earnings. At September 30, 2020, we had $10 million (net-of-tax) of unrealized losses on derivatives classified as cash flow hedges recorded in accumulated other comprehensive income. 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 $4 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 September 30, 2020. The following tables present the notional amount, estimated fair value and maturity of our derivative financial instruments: September 30, 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 $ 1 2026-2027 Derivatives in fair value hedge relationships: Assets Interest rate swaps on AFS securities $ 450 $ — 2022-2025 Interest rate swaps on HFI residential first mortgages 100 — 2024 Total derivative assets $ 550 $ — Derivatives not designated as hedging instruments: Assets Futures $ 1,132 $ — 2020-2023 Mortgage-backed securities forwards 3,471 9 2020 Rate lock commitments 12,015 257 2020-2021 Interest rate swaps 724 65 2020-2030 Total derivative assets $ 17,342 $ 331 Liabilities Mortgage-backed securities forwards $ 8,008 $ 37 2020 Rate lock commitments 169 — 2020-2021 Interest rate swaps and swaptions 2,030 9 2020-2050 Total derivative liabilities $ 10,207 $ 46 (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) September 30, 2020 Derivatives designated as hedging instruments: Assets Interest rate swaps on AFS securities $ — $ — $ — $ — $ 4 Interest rate swaps on custodial deposits 1 — 1 — 7 Interest rate swaps on HFI residential first mortgages — — — — 1 Total derivative assets $ 1 $ — $ 1 $ — $ 12 Liabilities Interest rate swaps on AFS securities $ — $ — $ — $ — $ — Total derivative liabilities $ — $ — $ — $ — $ — Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 9 $ — $ 9 $ — $ — Interest rate swaps 65 — 65 — — Futures — — — — — Total derivative assets $ 74 $ — $ 74 $ — $ — Liabilities Mortgage-backed securities forwards $ 37 $ — $ 37 $ — $ 39 Interest rate swaps and swaptions (1) 9 — 9 — 31 Total derivative liabilities $ 46 $ — $ 46 $ — $ 70 December 31, 2019 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 2 $ — $ 2 $ — $ — Interest rate swaps 26 — 26 — — Total derivative assets $ 28 $ — $ 28 $ — $ — Liabilities Mortgage-backed securities forwards $ 9 $ — $ 9 $ — $ 24 Interest rate swaps and swaptions (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 (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. Losses of $1 million on fair value hedging relationships of AFS securities were recorded in interest income for three and nine months ended September 30, 2020 Losses of $1 million and $2 million on cash flow hedging relationships of custodial deposits were reclassified from AOCI into loan administration income during the three and nine months ended September 30, 2020. Gains and losses on fair value hedging relationships of HFI residential first mortgages for the three and nine months ended September 30, 2020 were de-minimis. 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 $1,878 million at September 30, 2020 and $287 million at December 31, 2019 of which $8 million and $1 million, respectively, were due to the fair value hedge relationship. The closed portfolio of AFS securities designated in this last layer method hedge was $1,808 million par (amortized cost of $1,805 million) at September 30, 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 September 30, 2020 and December 31, 2019, respectively. The fair value basis adjustment on our hedged fair HFI residential first mortgages is included in loans held-for-investment on our Consolidated Statements of Financial Condition. The carrying amount of our hedged loans was $255 million at September 30, 2020 of which $1 million was due to the fair value hedge relationship. There were no hedged HFI residential first mortgages at December 31, 2019. We have designated $100 million of this closed portfolio of loans in a hedging relationship as of September 30, 2020. At September 30, 2020, we pledged a total of $82 million related to derivative financial instruments, consisting of $56 million of cash collateral on derivative liabilities and $26 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 recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Derivatives not designated as hedging instruments: Location of gain (loss) Futures Net loss on mortgage servicing rights $ — $ — $ 1 $ (2) Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights (2) 28 39 71 Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 5 3 28 23 Rate lock commitments and MSR forwards Net gain (loss) on loan sales 70 27 190 57 Forward commitments Other noninterest income — — — 2 Interest rate swaps (1) Other noninterest income — 2 1 3 Total derivative (loss) gain $ 73 $ 60 $ 259 $ 154 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Home Loan Bank Advances The following is a breakdown of our FHLB advances outstanding: September 30, 2020 December 31, 2019 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 1,555 0.20 % $ 3,695 1.61 % Other short-term borrowings (1) 671 0.11 % 470 1.64 % Total short-term Federal Home Loan Bank advances and other borrowings 2,226 4,165 Long-term fixed rate advances (2) 1,200 1.03 % 650 1.45 % Total long-term Federal Home Loan Bank advances 1,200 650 Total Federal Home Loan Bank advances and other borrowings $ 3,426 $ 4,815 (1) Includes borrowings under overnight federal funds purchased lines with other Federal Reserve member institutions. (2) There was no current portion of fixed rate advances at both September 30, 2020 and December 31, 2019. The following table contains detailed information on our FHLB advances and other borrowings: Three Months Ended September 30, Nine Months Ended 2020 2019 2020 2019 (Dollars in millions) Maximum outstanding at any month end $ 4,388 $ 2,979 $ 6,841 $ 3,391 Average outstanding balance $ 3,528 $ 2,446 $ 4,234 $ 2,769 Average remaining borrowing capacity $ 5,494 $ 4,957 $ 5,249 $ 3,932 Weighted average interest rate 0.48 % 2.10 % 0.76 % 2.33 % The following table outlines the maturity dates of our FHLB advances and other borrowings: September 30, 2020 (Dollars in millions) 2020 $ 2,226 2021 — 2022 200 2023 500 Thereafter 500 Total $ 3,426 Parent Company Senior Notes and Trust Preferred Securities The following table presents long-term debt, net of debt issuance costs: September 30, 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 3.48 % 26 5.20 % 3.25%, matures 2033 26 3.53 % 26 5.24 % 3.25%, matures 2033 26 3.47 % 26 5.21 % 2.00%, matures 2035 26 2.28 % 26 3.99 % 2.00%, matures 2035 26 2.28 % 26 3.99 % 1.75%, matures 2035 51 2.00 % 51 3.64 % 1.50%, matures 2035 25 1.78 % 25 3.49 % 1.45%, matures 2037 25 1.70 % 25 3.34 % 2.50%, matures 2037 16 2.75 % 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. 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 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table sets forth the components in accumulated other comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Investment Securities Beginning balance $ 56 $ (8) $ 1 $ (47) Unrealized gain — 18 72 61 Less: Tax provision — 5 17 15 Net unrealized gain — 13 55 46 Reclassifications out of AOCI (1) — — — 7 Less: Tax provision — — — 1 Net unrealized gain reclassified out of AOCI — — — 6 Other comprehensive income, net of tax — 13 55 52 Ending balance $ 56 $ 5 $ 56 $ 5 Cash Flow Hedges Beginning balance $ (10) $ — $ — $ — Unrealized loss — — (13) — Less: Tax benefit — — (3) — Net unrealized loss — — (10) — Reclassifications out of AOCI (1) — — — — Other comprehensive loss, net of tax — — (10) — Ending balance $ (10) $ — $ (10) $ — (1) Reclassifications are reported in noninterest income on the Consolidated Statements of Operations. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions, except share data) Net income applicable to common stockholders $ 222 $ 63 $ 384 $ 160 Weighted Average Shares Weighted average common shares outstanding 57,032,746 56,484,499 56,827,171 56,607,944 Effect of dilutive securities Stock-based awards 347,063 626,297 404,518 644,596 Weighted average diluted common shares $ 57,379,809 $ 57,110,796 $ 57,231,689 $ 57,252,540 Earnings per common share Basic earnings per common share $ 3.90 $ 1.12 $ 6.76 $ 2.83 Effect of dilutive securities Stock-based awards (0.02) (0.01) (0.05) (0.03) Diluted earnings per common share $ 3.88 $ 1.11 $ 6.71 $ 2.80 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We had stock-based compensation expense of $6 million and $14 million for the three and nine months ended September 30, 2020, and $4 million and $9 million for the three and nine months ended September 30, 2019. Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock units activity: Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,412,884 $ 29.72 1,399,127 $ 28.72 Granted 7,429 30.96 378,953 27.96 Vested (207,046) 26.48 (448,452) 25.50 Canceled and forfeited (133,394) 22.70 (249,755) 22.59 Non-vested balance at end of period 1,079,873 $ 31.21 1,079,873 $ 31.21 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 382,140 remain as of September 30, 2020. There were 43,946 and 149,789 shares issued under the ESPP during the three and nine months ended September 30, 2020 and the associated compensation expense was de minimis. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Income before income taxes $ 295 $ 78 $ 499 $ 197 Provision for income taxes 73 15 115 37 Effective tax provision rate 24.7 % 18.4 % 23.0 % 18.6 % We believe that it is unlikely that our unrecognized tax benefits will change by a material amount during the next 12 months. We recognize interest and penalties related to unrecognized tax benefits in provision for income taxes. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2020 | |
Banking and Thrift, Other Disclosures [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 September 30, 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) September 30, 2020 Tier 1 capital (to adjusted avg. total assets) $ 2,256 8.0 % $ 1,123 4.0 % $ 1,403 5.0 % Common equity Tier 1 capital (to RWA) $ 2,016 9.2 % $ 985 4.5 % $ 1,422 6.5 % Tier 1 capital (to RWA) $ 2,256 10.3 % $ 1,313 6.0 % $ 1,751 8.0 % Total capital (to RWA) $ 2,471 11.3 % $ 1,751 8.0 % $ 2,188 10.0 % December 31, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,720 7.6 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) $ 1,480 9.3 % $ 715 4.5 % $ 1,033 6.5 % Tier 1 capital (to RWA) $ 1,720 10.8 % $ 953 6.0 % $ 1,271 8.0 % Total capital (to RWA) $ 1,830 11.5 % $ 1,271 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) September 30, 2020 Tier 1 capital (to adjusted avg. total assets) $ 2,212 7.9 % $ 1,122 4.0 % $ 1,403 5.0 % Common equity Tier 1 capital (to RWA) $ 2,212 10.1 % $ 985 4.5 % $ 1,422 6.5 % Tier 1 capital (to RWA) $ 2,212 10.1 % $ 1,313 6.0 % $ 1,751 8.0 % Total capital (to RWA) $ 2,427 11.1 % $ 1,751 8.0 % $ 2,188 10.0 % December 31, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,752 7.7 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) $ 1,752 11.0 % $ 714 4.5 % $ 1,032 6.5 % Tier 1 capital (to RWA) $ 1,752 11.0 % $ 952 6.0 % $ 1,270 8.0 % Total capital (to RWA) $ 1,862 11.7 % $ 1,270 8.0 % $ 1,587 10.0 % |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Commitments | 9 Months Ended |
Sep. 30, 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 closing, purchase, sale, and servicing of mortgage loans. From time to time, governmental agencies also conduct investigations or examinations of various practices of the Bank. In the course of such investigations or examinations, the Bank cooperates with such agencies and provides information as requested. We assess the liabilities and loss contingencies in connection with pending or threatened legal and regulatory proceedings on at least a quarterly basis and establish accruals when we believe it is probable that a loss may be incurred and that the amount of such loss can be reasonably estimated. Once established, litigation accruals are adjusted, as appropriate, in light of additional information. At September 30, 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 September 30, 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 $7 million and $3 million, respectively. Commitments In the normal course of business, we have various commitments outstanding which are not included on our consolidated statements of financial position. The following table is a summary of the contractual amount of significant commitments: September 30, 2020 December 31, 2019 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 12,257 $ 4,099 Warehouse loan commitments 2,218 1,944 Commercial and industrial commitments 1,207 1,107 Other commercial commitments 1,653 2,015 HELOC commitments 562 558 Other consumer commitments 301 175 Standby and commercial letters of credit 97 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. Because 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 businesses 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. Because 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. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 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. September 30, 2020 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 1,171 $ — $ 1,171 Agency - Residential — 837 — 837 Municipal obligations — 30 — 30 Corporate debt obligations — 77 — 77 Other MBS — 49 — 49 Certificate of deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 5,349 — 5,349 Loans held-for-investment Residential first mortgage loans — 12 — 12 Home equity — — 2 2 Mortgage servicing rights — — 323 323 Derivative assets Rate lock commitments (fallout-adjusted) — — 257 257 Futures — — — — Mortgage-backed securities forwards — 9 — 9 Interest rate swaps and swaptions — 66 — 66 Total assets at fair value $ — $ 7,601 $ 582 $ 8,183 Derivative liabilities Mortgage backed securities forwards $ — $ (37) $ — $ (37) Interest rate swaps — (9) — (9) DOJ Liability — — (35) (35) Total liabilities at fair value $ — $ (46) $ (35) $ (81) 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 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) Mortgage-backed securities forwards — (9) — (9) Interest rate swaps — (8) — (8) DOJ Liability — — (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 Total Gains (Losses) Recorded in Earnings (1) Purchases / Closings Sales Settlement Transfers Out Balance at (Dollars in millions) Three Months Ended September 30, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 261 (23) 85 — — — 323 Rate lock commitments (net) (2)(3) 205 90 333 — — (371) 257 Totals $ 468 $ 67 $ 418 $ — $ — $ (371) $ 582 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (27) — — — 27 — — Totals $ (62) $ — $ — $ — $ 27 $ — $ (35) Three Months Ended September 30, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 316 (58) 39 (12) — — 285 Rate lock commitments (net) (2)(3) 50 20 113 — — (133) 50 Totals $ 368 $ (38) $ 152 $ (12) $ — $ (133) $ 337 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (7) (4) — — 3 — (8) Totals $ (42) $ (4) $ — $ — $ 3 $ — $ (43) (1) There were no unrealized gains (losses) recorded in OCI during the three months ended September 30, 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. Balance at Total Gains (Losses) Recorded in Earnings (1) Purchases / Closings Sales Settlement Transfers Out Balance at (Dollars in millions) Nine Months Ended September 30, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 291 (131) 209 (46) — — 323 Rate lock commitments (net) (2)(3) 34 274 805 — — (856) 257 Totals $ 327 $ 143 $ 1,014 $ (46) $ — $ (856) $ 582 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (10) (17) — — 27 — — Totals $ (45) $ (17) $ — $ — $ 27 $ — $ (35) Nine Months Ended September 30, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 290 (151) 203 (57) — — 285 Rate lock commitments (net) (2)(3) 20 75 245 — — (290) 50 Totals $ 312 $ (76) $ 448 $ (57) $ — $ (290) $ 337 Liabilities DOJ Liability $ (60) $ 25 $ — $ — $ — $ — $ (35) Contingent consideration (6) (5) — — 3 — (8) Totals $ (66) $ 20 $ — $ — $ 3 $ — $ (43) (1) There were no unrealized gains (losses) recorded in OCI during the nine months ended September 30, 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) September 30, 2020 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) 23.1% - 34.7% (28.9%) 1.7%-2.6% (2.2%) (1) Mortgage servicing rights $ 323 Discounted cash flows Option adjusted spread 3.7% - 21.2% (7.6%) 0% - 14.3% (11.4%) $67 - $95 ($82) (1) Rate lock commitments (net) $ 257 Consensus pricing Closing pull-through rate 80.6% - 87.2% (81.9%) (1) Liabilities DOJ Liability $ (35) Discounted cash flows See description below See description below 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%) 13.0% - 19.5% (16.2%) 2.7%-4.0% (3.3%) (1) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 2.4% - 20.4% (5.3%) 0% - 12.3% (10.6%) $67 - $95 ($84) (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 September 30, 2020 and December 31, 2019, the weighted average life (in years) for the entire MSR portfolio was 3.9 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. 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 Losses (Dollars in millions) September 30, 2020 Loans held-for-sale (2) $ 14 $ 14 $ — $ (1) Impaired loans held-for-investment (2) Residential first mortgage loans 21 — 21 (3) Repossessed assets (3) 6 — 6 (3) Totals $ 41 $ 14 $ 27 $ (7) 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 dependent upon when certain conditions were met requiring fair value measurement. (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) September 30, 2020 Impaired loans held-for-investment Residential first mortgage loans $ 21 Fair value of collateral Loss severity discount 0% - 100% (12.4%) (1) Repossessed assets $ 6 Fair value of collateral Loss severity discount 0% - 96.3% (31.8%) (1) December 31, 2019 Impaired loans held-for-investment Residential first mortgage loans $ 14 Fair value of collateral Loss severity discount 25% - 30% (25.9%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (17.1%) (1) (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: September 30, 2020 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 280 $ 280 $ 280 $ — $ — Investment securities available-for-sale 2,165 2,165 — 2,165 — Investment securities held-to-maturity 440 458 — 458 — Loans held-for-sale 5,372 5,372 — 5,372 — Loans held-for-investment 16,476 16,266 — 12 16,254 Loans with government guarantees 2,500 2,480 — 2,480 — Mortgage servicing rights 323 323 — — 323 Federal Home Loan Bank stock 377 377 — 377 — Bank owned life insurance 355 355 — 355 — Repossessed assets 6 6 — — 6 Other assets, foreclosure claims 22 22 — 22 — Derivative financial instruments, assets 332 332 — 75 257 Liabilities Retail deposits Demand deposits and savings accounts $ (8,223) $ (7,634) $ — $ (7,634) $ — Certificates of deposit (1,525) (1,539) — (1,539) — Wholesale deposits (1,034) (1,053) — (1,053) — Government deposits (1,748) (1,703) — (1,703) — Company controlled deposits (7,416) (7,377) — (7,377) — Federal Home Loan Bank advances and other (3,426) (3,455) — (3,455) — Long-term debt (493) (449) — (449) — DOJ Liability (35) (35) — — (35) Contingent consideration — — — — — Derivative financial instruments, liabilities (46) (46) — (46) — 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 340 $ 97 $ 899 $ 272 Loans held-for-investment Other noninterest income $ — $ 1 $ — $ 1 Liabilities DOJ Liability Other noninterest income $ — $ — $ — $ 25 The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected: September 30, 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 $ 6 $ 5 $ (1) $ 3 $ 3 $ — Loans held-for-investment 9 8 (1) 5 4 (1) Total nonaccrual loans $ 15 $ 13 $ (2) $ 8 $ 7 $ (1) Other performing loans Loans held-for-sale $ 5,125 $ 5,344 $ 219 $ 5,057 $ 5,216 $ 159 Loans held-for-investment 6 5 (1) 8 8 — Total other performing loans $ 5,131 $ 5,349 $ 218 $ 5,065 $ 5,224 $ 159 Total loans Loans held-for-sale $ 5,131 $ 5,349 $ 218 $ 5,060 $ 5,219 $ 159 Loans held-for-investment 15 13 (2) 13 12 (1) Total loans $ 5,146 $ 5,362 $ 216 $ 5,073 $ 5,231 $ 158 Liabilities DOJ Liability (1) $ (118) $ (35) $ 83 $ (118) $ (35) $ 83 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 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 Originations 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 and Warehouse Lending. 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 interest income on LHFI is recognized in the Community Banking segment, excluding residential first mortgages and newly originated home equity products within the Mortgage Originations segment. 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 Originations 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 and newly originated home equity products within LHFI. 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 a majority of provision (benefit) for income taxes, are allocated to each operating segment. Provision for credit losses is allocated to segments based on net charge offs and changes in outstanding balances. In contrast, the level of the consolidated provision for credit losses is determined based on an allowance model using the methodologies described in Item 2 – MD&A. The net effect of the credit provision is recorded in the Other segment. Allocation methodologies may be subject to periodic adjustment as the internal management accounting system is revised and the business or product lines within the segments change. The following tables present financial information by business segment for the periods indicated: Three Months Ended September 30, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 158 $ 49 $ 5 $ (32) $ 180 Provision (benefit) for credit losses (2) (3) — 37 32 Net interest income after provision (benefit) for credit losses 160 52 5 (69) 148 Net gain on loan sales 2 344 — — 346 Loan fees and charges — 29 16 — 45 Net return on mortgage servicing rights — 12 — — 12 Loan administrative (expense) income (1) (10) 40 (3) 26 Other noninterest income 15 3 — 5 23 Total noninterest income 16 378 56 2 452 Compensation and benefits 28 42 12 41 123 Commissions 1 71 — — 72 Loan processing expense 1 15 8 — 24 Other noninterest expense 63 32 21 (30) 86 Total noninterest expense 93 160 41 11 305 Income (loss) before indirect overhead allocations and income taxes 83 270 20 (78) 295 Indirect overhead allocation income (expense) (11) (18) (4) 33 — Provision (benefit) for income taxes 15 53 3 2 73 Net income (loss) $ 57 $ 199 $ 13 $ (47) $ 222 Intersegment (expense) revenue $ (22) $ (12) $ 10 $ 24 $ — Average balances Loans held-for-sale $ — $ 5,602 $ — $ — $ 5,602 Loans with government guarantees — 2,122 — — 2,122 Loans held-for-investment (2) 12,311 2,498 — 30 14,839 Total assets 12,603 11,195 78 4,401 28,277 Deposits 11,265 — 7,329 967 19,561 (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 September 30, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 105 $ 37 $ 5 $ (1) $ 146 Provision (benefit) for credit losses — (2) — 3 1 Net interest income after provision for credit losses 105 39 5 (4) 145 Net gain (loss) on loan sales (4) 114 — — 110 Loan fees and charges — 20 8 1 29 Net return on mortgage servicing rights — (2) — — (2) Loan administrative (expense) income (1) (7) 32 (19) 5 Other noninterest income 18 2 — 9 29 Total noninterest income 13 127 40 (9) 171 Compensation and benefits 27 29 7 35 98 Commissions — 37 — 1 38 Loan processing expense 1 10 10 1 22 Other noninterest expense 42 25 14 (1) 80 Total noninterest expense 70 101 31 36 238 Income (loss) before indirect overhead allocations and income taxes 48 65 14 (49) 78 Indirect overhead allocation income (expense) (10) (10) (4) 24 — Provision (benefit) for income taxes 8 11 2 (6) 15 Net income (loss) $ 30 $ 44 $ 8 $ (19) $ 63 Intersegment (expense) revenue $ (6) $ 8 $ 7 $ (9) $ — Average balances Loans held-for-sale $ 20 $ 3,766 $ — $ — $ 3,786 Loans with government guarantees — 574 — — 574 Loans held-for-investment (2) 11,681 33 — 29 11,743 Total assets 12,184 5,378 38 3,597 21,197 Deposits 10,513 — 4,556 748 15,817 (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. Nine Months Ended September 30, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 395 $ 147 $ 14 $ (60) $ 496 Provision (benefit) for credit losses 3 (8) — 153 148 Net interest income after provision (benefit) for credit losses 392 155 14 (213) 348 Net gain on loan sales 2 737 — — 739 Loan fees and charges 1 68 43 — 112 Net loss on mortgage servicing rights — 10 — — 10 Loan administrative (expense) income (2) (25) 112 (26) 59 Other noninterest income 43 5 — 20 68 Total noninterest income 44 795 155 (6) 988 Compensation and benefits 79 111 33 118 341 Commissions 2 160 — — 162 Loan processing expense 4 39 24 2 69 Other noninterest expense 231 114 57 (137) 265 Total noninterest expense 316 424 114 (17) 837 Income (loss) before indirect overhead allocations and income taxes 120 526 55 (202) 499 Indirect overhead allocation income (expense) (31) (45) (15) 91 — Provision (benefit) for income taxes 19 101 8 (13) 115 Net income (loss) $ 70 $ 380 $ 32 $ (98) $ 384 Intersegment (expense) revenue $ (97) $ (46) $ 27 $ 116 $ — Average balances Loans held-for-sale $ — $ 5,499 $ — $ — $ 5,499 Loans with government guarantees — 1,267 — — 1,267 Loans held-for-investment (2) 10,702 2,693 — 29 13,424 Total assets 11,100 10,539 65 4,288 25,992 Deposits 10,817 — 6,114 767 17,698 (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. Nine Months Ended September 30, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 296 $ 103 $ 11 $ — $ 410 Provision (benefit) for credit losses 17 (3) — 4 18 Net interest income after provision for credit losses 279 106 11 (4) 392 Net gain (loss) on loan sales (10) 243 — 1 234 Loan fees and charges 1 47 22 — 70 Net return on mortgage servicing rights — 9 — — 9 Loan administrative (expense) income (3) (16) 91 (50) 22 Other noninterest income 46 9 — 58 113 Total noninterest income 34 292 113 9 448 Compensation and benefits 77 79 19 100 275 Commissions 1 75 — — 76 Loan processing expense 5 23 30 2 60 Other noninterest expense 125 63 43 1 232 Total noninterest expense 208 240 92 103 643 Income (loss) before indirect overhead allocations and income taxes 105 158 32 (98) 197 Indirect overhead allocation income (expense) (30) (30) (13) 73 — Provision (benefit) for income taxes 16 26 4 (9) 37 Net income (loss) $ 59 $ 102 $ 15 $ (16) $ 160 Intersegment (expense) revenue $ (14) $ 19 $ 19 $ (24) $ — Average balances Loans held-for-sale $ 37 $ 3,495 $ — $ — $ 3,532 Loans with government guarantees — 511 — — 511 Loans held-for-investment (2) 10,465 22 — 29 10,516 Total assets 10,950 5,018 47 3,862 19,877 Deposits 10,247 — 3,536 522 14,305 (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 | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adoption of New Accounting Standards We adopted the following ASU during the quarter ended September 30, 2020, which did not have a material impact to our financial statements: Standard Descriptions Effective Date ASU 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity September 1, 2020 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subordinated Notes On October 28, 2020, we issued $150 million of Subordinated Debt (the "Notes") with a maturity date of November 1, 2030. The Notes bear interest at a fixed rate of 4.125% through October 31, 2025, and a variable rate tied to SOFR thereafter until maturity. We have the option to redeem all or a part of the Notes beginning on November 1, 2025 and on any subsequent interest payment date. The Notes will qualify as Tier 2 capital for regulatory purposes. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Adoption of New Accounting Standards | Adoption of New Accounting Standards We adopted the following ASU during the quarter ended September 30, 2020, which did not have a material impact to our financial statements: Standard Descriptions Effective Date ASU 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity September 1, 2020 |
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 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. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 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 Gross Unrealized Fair Value (Dollars in millions) September 30, 2020 Available-for-sale securities Agency - Commercial $ 1,126 $ 45 $ — $ 1,171 Agency - Residential 806 31 — 837 Corporate debt obligations 76 1 — 77 Municipal obligations 29 1 — 30 Other MBS 49 — — 49 Certificate of deposits 1 — — 1 Total available-for-sale securities (1) $ 2,087 $ 78 $ — $ 2,165 Held-to-maturity securities Agency - Commercial $ 221 $ 8 $ — $ 229 Agency - Residential 219 10 — 229 Total held-to-maturity securities (1) $ 440 $ 18 $ — $ 458 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 September 30, 2020 or December 31, 2019. |
Summary of Unrealized Loss Positions on Investment Securities - Held-to-Maturity | The following table summarizes the unrealized loss positions on available-for-sale and held-to-maturity investment securities, by duration of the unrealized loss: Unrealized Loss Position with Unrealized Loss Position with Fair Value Number of Securities Unrealized Loss Fair Number of Unrealized (Dollars in millions) September 30, 2020 Available-for-sale securities Agency - Commercial $ 3 1 $ — $ 4 1 $ — Municipal obligations $ — — $ — $ 6 1 $ — Corporate debt obligations $ — — $ — $ 13 4 $ — Other mortgage-backed securities $ — — $ — $ — 1 $ — Held-to-maturity securities Agency - Residential $ — — $ — $ 5 2 $ — 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 the unrealized loss positions on available-for-sale and held-to-maturity investment securities, by duration of the unrealized loss: Unrealized Loss Position with Unrealized Loss Position with Fair Value Number of Securities Unrealized Loss Fair Number of Unrealized (Dollars in millions) September 30, 2020 Available-for-sale securities Agency - Commercial $ 3 1 $ — $ 4 1 $ — Municipal obligations $ — — $ — $ 6 1 $ — Corporate debt obligations $ — — $ — $ 13 4 $ — Other mortgage-backed securities $ — — $ — $ — 1 $ — Held-to-maturity securities Agency - Residential $ — — $ — $ 5 2 $ — 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 Fair Weighted Average Amortized Fair Weighted Average (Dollars in millions) September 30, 2020 Due in one year or less $ 5 $ 5 2.24 % $ — $ — — % Due after one year through five years 8 8 2.71 % 8 8 2.52 % Due after five years through 10 years 108 111 4.23 % 8 8 2.35 % Due after 10 years 1,966 2,041 2.38 % 424 442 2.34 % Total $ 2,087 $ 2,165 $ 440 $ 458 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2020 December 31, 2019 (Dollars in millions) Consumer loans Residential first mortgage $ 2,472 $ 3,154 Home equity 924 1,024 Other 973 729 Total consumer loans 4,369 4,907 Commercial loans Commercial real estate 2,996 2,828 Commercial and industrial 1,520 1,634 Warehouse lending 7,591 2,760 Total commercial loans 12,107 7,222 Total loans held-for-investment $ 16,476 $ 12,129 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: Nine Months Ended September 30, 2020 2019 (Dollars in millions) Loans Sold (1) Performing loans $ 436 $ 166 Total loans sold $ 436 $ 166 Net gain associated with loan sales (2) $ 3 $ 2 Loans Purchased Home equity $ — $ 199 Other consumer (3) 63 51 Total loans purchased $ 63 $ 250 Premium associated with loans purchased $ — $ 9 (1) Upon a change in our intent, the loans were transferred to LHFS and subsequently sold. (2) Recorded in net gain on loan sales on Consolidated 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 Home Equity Other Commercial Commercial Warehouse Total (Dollars in millions) Three Months Ended September 30, 2020 Beginning balance $ 60 $ 28 $ 34 $ 83 $ 23 $ 1 $ 229 Provision (6) 1 4 6 19 4 28 Charge-offs (2) (1) (1) — — — (4) Recoveries — 1 1 — — — 2 Ending allowance balance $ 52 $ 29 $ 38 $ 89 $ 42 $ 5 $ 255 Three Months Ended September 30, 2019 Beginning balance $ 26 $ 16 $ 5 $ 35 $ 23 $ 5 $ 110 Provision (benefit) 2 — 3 (2) (2) — 1 Charge-offs (1) (1) (2) — — — (4) Recoveries 1 1 — — 1 — 3 Ending allowance balance $ 28 $ 16 $ 6 $ 33 $ 22 $ 5 $ 110 Nine Months Ended September 30, 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 10 3 24 65 26 4 132 Charge-offs (5) (3) (4) — — — (12) Recoveries — 3 2 — — — 5 Ending allowance balance $ 52 $ 29 $ 38 $ 89 $ 42 $ 5 $ 255 Nine Months Ended September 30, 2019 Beginning balance $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Provision (benefit) (8) — 8 (15) 34 (1) 18 Charge-offs (3) (1) (5) — (31) — (40) Recoveries 1 2 — — 1 — 4 Ending allowance balance $ 28 $ 16 $ 6 $ 33 $ 22 $ 5 $ 110 (1) Includes loans with government guarantees. |
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 60-89 Days 90 Days or Total Current Total LHFI (3) (4) (Dollars in millions) September 30, 2020 Consumer loans Residential first mortgage $ 5 $ 3 $ 30 $ 38 $ 2,434 $ 2,472 Home equity 1 — 4 5 919 924 Other 3 1 2 6 967 973 Total consumer loans 9 4 36 49 4,320 4,369 Commercial loans Commercial real estate — — — — 2,996 2,996 Commercial and industrial — — 10 10 1,510 1,520 Warehouse lending — — — — 7,591 7,591 Total commercial loans — — 10 10 12,097 12,107 Total loans (2) $ 9 $ 4 $ 46 $ 59 $ 16,417 $ 16,476 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 $8 million and $4 million of past due loans accounted for under the fair value option as of September 30, 2020 and December 31, 2019, respectively. (3) Collateral dependent loans totaled $74 million at September 30, 2020 and $54 million at December 31, 2019, respectively. The majority of these loans are secured by real estate. |
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) September 30, 2020 Consumer loans Residential first mortgage $ 20 $ 7 $ 27 Home equity 14 2 16 Commercial Real Estate 5 — 5 Total TDRs (1)(2) $ 39 $ 9 $ 48 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 September 30, 2020 and December 31, 2019, respectively. (2) Includes $2 million of TDR loans accounted for under the fair value option at September 30, 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 September 30, 2020 Residential first mortgages 1 $ — $ — Home equity (2)(3) 1 — — Consumer 1 — — Total TDR loans 3 $ — $ — Three Months Ended September 30, 2019 Residential first mortgages 4 $ 1 $ 1 Total TDR loans 4 $ 1 $ 1 Nine Months Ended September 30, 2020 Residential first mortgages 6 $ 1 $ 1 Home equity (2)(3) 3 — — Consumer 2 — — Commercial Real Estate 1 5 5 Total TDR loans 12 $ 6 $ 6 Nine Months Ended September 30, 2019 Residential first mortgages 6 $ 1 $ 1 Home equity (2)(3) 4 1 1 Total TDR loans 10 $ 2 $ 2 (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification UPB reflects write downs. (3) Includes loans carried at the fair value option. |
Loan Credit Quality Indicators | The following table presents the amortized cost in residential and consumer loans based on payment activity: Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total December 31, 2019 Term Loans Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential First Mortgage Pass $ 256 $ 630 $ 272 $ 348 $ 308 $ 483 $ 105 $ 8 $ 2,410 $ 3,107 Watch — 1 — 2 — 16 — — 19 23 Substandard — 4 6 2 — 17 — 1 30 15 Home Equity Pass 6 37 16 7 2 12 799 29 908 1,002 Watch — — — — — 12 — — 12 16 Substandard — — — — — 1 1 — 2 3 Other Consumer Pass 226 345 165 4 2 7 218 5 972 727 Watch — — — — — — — — — 1 Substandard — — 1 — — — — — 1 1 Total Consumer Loans (1) $ 488 $ 1,017 $ 460 $ 363 $ 312 $ 548 $ 1,123 $ 43 $ 4,354 $ 4,895 (1) Excludes loans carried under the fair value option The following table presents the amortized cost in residential and consumer loans based on credit scores: Revolving Loans Converted to Term Loans Amortized Cost Basis FICO Band Revolving Loans Amortized Cost Basis Total Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential First Mortgage >750 $ 151 $ 323 $ 141 $ 241 $ 228 $ 272 $ 61 $ 2 $ 1,419 700-750 79 212 106 95 73 148 30 5 748 <700 26 100 31 16 7 96 14 2 292 Home Equity >750 2 11 6 3 — 7 358 4 391 700-750 2 14 5 3 1 9 319 14 367 <700 2 12 5 1 1 9 123 11 164 Other Consumer >750 160 220 87 1 — 5 200 5 678 700-750 61 114 65 3 2 2 18 — 265 <700 5 11 14 — — — — — 30 Total Consumer Loans (1) $ 488 $ 1,017 $ 460 $ 363 $ 312 $ 548 $ 1,123 $ 43 $ 4,354 (1) Excludes loans carried under the fair value option 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: Revolving Loans Converted to Term Loans Amortized Cost Basis LTV Band Revolving Loans Amortized Cost Basis Total Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Consumer Loans (Dollars in millions) Residential first mortgage >90 $ 53 $ 286 $ 142 $ 39 $ 3 $ 21 $ — $ — $ 544 71-90 122 213 77 123 82 267 — — 884 55-70 64 78 29 99 121 140 — — 531 <55 17 58 30 91 102 88 105 9 500 Home Equity >90 — — — 2 1 11 1 — 15 71-90 4 29 12 4 1 10 612 21 693 <=70 2 8 4 1 — 4 187 8 214 Total (1) $ 262 $ 672 $ 294 $ 359 $ 310 $ 541 $ 905 $ 38 $ 3,381 (1) Excludes loans carried under the fair value option 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 December 31, 2019 Amortized Cost Basis by Closing Year As of September 30, 2020 2020 2019 2018 2017 2016 Prior Commercial Loans (Dollars in million) Commercial real estate Pass $ 249 $ 978 $ 466 $ 452 $ 325 $ 239 $ (1) $ — $ 2,708 $ 2,794 Watch 20 14 81 44 28 31 — — 218 24 Special mention 4 9 16 — 10 — — — 39 5 Substandard — 3 3 25 — — — — 31 5 Commercial and industrial Pass 212 494 185 188 107 116 20 — 1,322 1,533 Watch 2 46 26 25 — 1 — — 100 72 Special mention 2 13 13 17 — 5 — — 50 24 Substandard 21 1 16 10 — — — — 48 5 Warehouse Pass — — — — — — 7,381 — 7,381 2,556 Watch — — — — — — 195 — 195 189 Special mention — — — — — — 15 — 15 15 Substandard — — — — — — — — — — Total commercial loans $ 510 $ 1,558 $ 806 $ 761 $ 470 $ 392 $ 7,610 $ — $ 12,107 $ 7,222 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Balance at beginning of period $ 261 $ 316 $ 291 $ 290 Additions from loans sold with servicing retained 85 39 209 203 Reductions from sales — (12) (46) (57) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (25) (30) (74) (60) Changes in estimates of fair value due to interest rate risk (1) (2) 2 (28) (57) (91) Fair value of MSRs at end of period $ 323 $ 285 $ 323 $ 285 (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: September 30, 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 7.61 % $ 316 $ 310 5.34 % $ 284 $ 280 Constant prepayment rate 11.36 % $ 300 $ 279 10.59 % $ 271 $ 257 Weighted average cost to service per loan $ 81.68 $ 320 $ 316 $ 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 30 $ 25 $ 75 $ 70 Decrease in MSR fair value due to pay-offs, pay-downs, (25) (30) (74) (60) Changes in fair value due to interest rate risk 2 (28) (57) (91) Gain on MSR derivatives (2) 4 31 68 92 Net transaction costs 1 — (2) (2) Total return (loss) included in net return on mortgage servicing rights $ 12 $ (2) $ 10 $ 9 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 33 $ 27 $ 94 $ 77 Charges on subserviced custodial balances (2) (3) (20) (26) (50) Other servicing charges (4) (2) (9) (5) Total income on mortgage loans subserviced, included in loan administration $ 26 $ 5 $ 59 $ 22 (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) | 9 Months Ended |
Sep. 30, 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 tables present the notional amount, estimated fair value and maturity of our derivative financial instruments: September 30, 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 $ 1 2026-2027 Derivatives in fair value hedge relationships: Assets Interest rate swaps on AFS securities $ 450 $ — 2022-2025 Interest rate swaps on HFI residential first mortgages 100 — 2024 Total derivative assets $ 550 $ — Derivatives not designated as hedging instruments: Assets Futures $ 1,132 $ — 2020-2023 Mortgage-backed securities forwards 3,471 9 2020 Rate lock commitments 12,015 257 2020-2021 Interest rate swaps 724 65 2020-2030 Total derivative assets $ 17,342 $ 331 Liabilities Mortgage-backed securities forwards $ 8,008 $ 37 2020 Rate lock commitments 169 — 2020-2021 Interest rate swaps and swaptions 2,030 9 2020-2050 Total derivative liabilities $ 10,207 $ 46 (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. |
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) September 30, 2020 Derivatives designated as hedging instruments: Assets Interest rate swaps on AFS securities $ — $ — $ — $ — $ 4 Interest rate swaps on custodial deposits 1 — 1 — 7 Interest rate swaps on HFI residential first mortgages — — — — 1 Total derivative assets $ 1 $ — $ 1 $ — $ 12 Liabilities Interest rate swaps on AFS securities $ — $ — $ — $ — $ — Total derivative liabilities $ — $ — $ — $ — $ — Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 9 $ — $ 9 $ — $ — Interest rate swaps 65 — 65 — — Futures — — — — — Total derivative assets $ 74 $ — $ 74 $ — $ — Liabilities Mortgage-backed securities forwards $ 37 $ — $ 37 $ — $ 39 Interest rate swaps and swaptions (1) 9 — 9 — 31 Total derivative liabilities $ 46 $ — $ 46 $ — $ 70 December 31, 2019 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 2 $ — $ 2 $ — $ — Interest rate swaps 26 — 26 — — Total derivative assets $ 28 $ — $ 28 $ — $ — Liabilities Mortgage-backed securities forwards $ 9 $ — $ 9 $ — $ 24 Interest rate swaps and swaptions (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 (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 recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Derivatives not designated as hedging instruments: Location of gain (loss) Futures Net loss on mortgage servicing rights $ — $ — $ 1 $ (2) Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights (2) 28 39 71 Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 5 3 28 23 Rate lock commitments and MSR forwards Net gain (loss) on loan sales 70 27 190 57 Forward commitments Other noninterest income — — — 2 Interest rate swaps (1) Other noninterest income — 2 1 3 Total derivative (loss) gain $ 73 $ 60 $ 259 $ 154 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Breakdown of FHLB Advances Outstanding | The following is a breakdown of our FHLB advances outstanding: September 30, 2020 December 31, 2019 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 1,555 0.20 % $ 3,695 1.61 % Other short-term borrowings (1) 671 0.11 % 470 1.64 % Total short-term Federal Home Loan Bank advances and other borrowings 2,226 4,165 Long-term fixed rate advances (2) 1,200 1.03 % 650 1.45 % Total long-term Federal Home Loan Bank advances 1,200 650 Total Federal Home Loan Bank advances and other borrowings $ 3,426 $ 4,815 (1) Includes borrowings under overnight federal funds purchased lines with other Federal Reserve member institutions. (2) There was no current portion of fixed rate advances at both September 30, 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 September 30, Nine Months Ended 2020 2019 2020 2019 (Dollars in millions) Maximum outstanding at any month end $ 4,388 $ 2,979 $ 6,841 $ 3,391 Average outstanding balance $ 3,528 $ 2,446 $ 4,234 $ 2,769 Average remaining borrowing capacity $ 5,494 $ 4,957 $ 5,249 $ 3,932 Weighted average interest rate 0.48 % 2.10 % 0.76 % 2.33 % |
Maturity Dates of FHLB Advances and Other Borrowings | The following table outlines the maturity dates of our FHLB advances and other borrowings: September 30, 2020 (Dollars in millions) 2020 $ 2,226 2021 — 2022 200 2023 500 Thereafter 500 Total $ 3,426 |
Long-Term Debt, Net of Debt Issuance Costs | The following table presents long-term debt, net of debt issuance costs: September 30, 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 3.48 % 26 5.20 % 3.25%, matures 2033 26 3.53 % 26 5.24 % 3.25%, matures 2033 26 3.47 % 26 5.21 % 2.00%, matures 2035 26 2.28 % 26 3.99 % 2.00%, matures 2035 26 2.28 % 26 3.99 % 1.75%, matures 2035 51 2.00 % 51 3.64 % 1.50%, matures 2035 25 1.78 % 25 3.49 % 1.45%, matures 2037 25 1.70 % 25 3.34 % 2.50%, matures 2037 16 2.75 % 16 4.39 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 493 $ 496 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income | The following table sets forth the components in accumulated other comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Investment Securities Beginning balance $ 56 $ (8) $ 1 $ (47) Unrealized gain — 18 72 61 Less: Tax provision — 5 17 15 Net unrealized gain — 13 55 46 Reclassifications out of AOCI (1) — — — 7 Less: Tax provision — — — 1 Net unrealized gain reclassified out of AOCI — — — 6 Other comprehensive income, net of tax — 13 55 52 Ending balance $ 56 $ 5 $ 56 $ 5 Cash Flow Hedges Beginning balance $ (10) $ — $ — $ — Unrealized loss — — (13) — Less: Tax benefit — — (3) — Net unrealized loss — — (10) — Reclassifications out of AOCI (1) — — — — Other comprehensive loss, net of tax — — (10) — Ending balance $ (10) $ — $ (10) $ — (1) Reclassifications are reported in noninterest income on the Consolidated Statements of Operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions, except share data) Net income applicable to common stockholders $ 222 $ 63 $ 384 $ 160 Weighted Average Shares Weighted average common shares outstanding 57,032,746 56,484,499 56,827,171 56,607,944 Effect of dilutive securities Stock-based awards 347,063 626,297 404,518 644,596 Weighted average diluted common shares $ 57,379,809 $ 57,110,796 $ 57,231,689 $ 57,252,540 Earnings per common share Basic earnings per common share $ 3.90 $ 1.12 $ 6.76 $ 2.83 Effect of dilutive securities Stock-based awards (0.02) (0.01) (0.05) (0.03) Diluted earnings per common share $ 3.88 $ 1.11 $ 6.71 $ 2.80 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2020 Nine Months Ended September 30, 2020 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,412,884 $ 29.72 1,399,127 $ 28.72 Granted 7,429 30.96 378,953 27.96 Vested (207,046) 26.48 (448,452) 25.50 Canceled and forfeited (133,394) 22.70 (249,755) 22.59 Non-vested balance at end of period 1,079,873 $ 31.21 1,079,873 $ 31.21 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Income before income taxes $ 295 $ 78 $ 499 $ 197 Provision for income taxes 73 15 115 37 Effective tax provision rate 24.7 % 18.4 % 23.0 % 18.6 % |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Banking and Thrift, Other Disclosures [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) September 30, 2020 Tier 1 capital (to adjusted avg. total assets) $ 2,256 8.0 % $ 1,123 4.0 % $ 1,403 5.0 % Common equity Tier 1 capital (to RWA) $ 2,016 9.2 % $ 985 4.5 % $ 1,422 6.5 % Tier 1 capital (to RWA) $ 2,256 10.3 % $ 1,313 6.0 % $ 1,751 8.0 % Total capital (to RWA) $ 2,471 11.3 % $ 1,751 8.0 % $ 2,188 10.0 % December 31, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,720 7.6 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) $ 1,480 9.3 % $ 715 4.5 % $ 1,033 6.5 % Tier 1 capital (to RWA) $ 1,720 10.8 % $ 953 6.0 % $ 1,271 8.0 % Total capital (to RWA) $ 1,830 11.5 % $ 1,271 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) September 30, 2020 Tier 1 capital (to adjusted avg. total assets) $ 2,212 7.9 % $ 1,122 4.0 % $ 1,403 5.0 % Common equity Tier 1 capital (to RWA) $ 2,212 10.1 % $ 985 4.5 % $ 1,422 6.5 % Tier 1 capital (to RWA) $ 2,212 10.1 % $ 1,313 6.0 % $ 1,751 8.0 % Total capital (to RWA) $ 2,427 11.1 % $ 1,751 8.0 % $ 2,188 10.0 % December 31, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,752 7.7 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) $ 1,752 11.0 % $ 714 4.5 % $ 1,032 6.5 % Tier 1 capital (to RWA) $ 1,752 11.0 % $ 952 6.0 % $ 1,270 8.0 % Total capital (to RWA) $ 1,862 11.7 % $ 1,270 8.0 % $ 1,587 10.0 % |
Legal Proceedings, Contingenc_2
Legal Proceedings, Contingencies and Commitments (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2020 December 31, 2019 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 12,257 $ 4,099 Warehouse loan commitments 2,218 1,944 Commercial and industrial commitments 1,207 1,107 Other commercial commitments 1,653 2,015 HELOC commitments 562 558 Other consumer commitments 301 175 Standby and commercial letters of credit 97 82 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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. September 30, 2020 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 1,171 $ — $ 1,171 Agency - Residential — 837 — 837 Municipal obligations — 30 — 30 Corporate debt obligations — 77 — 77 Other MBS — 49 — 49 Certificate of deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 5,349 — 5,349 Loans held-for-investment Residential first mortgage loans — 12 — 12 Home equity — — 2 2 Mortgage servicing rights — — 323 323 Derivative assets Rate lock commitments (fallout-adjusted) — — 257 257 Futures — — — — Mortgage-backed securities forwards — 9 — 9 Interest rate swaps and swaptions — 66 — 66 Total assets at fair value $ — $ 7,601 $ 582 $ 8,183 Derivative liabilities Mortgage backed securities forwards $ — $ (37) $ — $ (37) Interest rate swaps — (9) — (9) DOJ Liability — — (35) (35) Total liabilities at fair value $ — $ (46) $ (35) $ (81) 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 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) Mortgage-backed securities forwards — (9) — (9) Interest rate swaps — (8) — (8) DOJ Liability — — (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 Total Gains (Losses) Recorded in Earnings (1) Purchases / Closings Sales Settlement Transfers Out Balance at (Dollars in millions) Three Months Ended September 30, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 261 (23) 85 — — — 323 Rate lock commitments (net) (2)(3) 205 90 333 — — (371) 257 Totals $ 468 $ 67 $ 418 $ — $ — $ (371) $ 582 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (27) — — — 27 — — Totals $ (62) $ — $ — $ — $ 27 $ — $ (35) Three Months Ended September 30, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 316 (58) 39 (12) — — 285 Rate lock commitments (net) (2)(3) 50 20 113 — — (133) 50 Totals $ 368 $ (38) $ 152 $ (12) $ — $ (133) $ 337 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (7) (4) — — 3 — (8) Totals $ (42) $ (4) $ — $ — $ 3 $ — $ (43) (1) There were no unrealized gains (losses) recorded in OCI during the three months ended September 30, 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. Balance at Total Gains (Losses) Recorded in Earnings (1) Purchases / Closings Sales Settlement Transfers Out Balance at (Dollars in millions) Nine Months Ended September 30, 2020 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 291 (131) 209 (46) — — 323 Rate lock commitments (net) (2)(3) 34 274 805 — — (856) 257 Totals $ 327 $ 143 $ 1,014 $ (46) $ — $ (856) $ 582 Liabilities DOJ Liability $ (35) $ — $ — $ — $ — $ — $ (35) Contingent consideration (10) (17) — — 27 — — Totals $ (45) $ (17) $ — $ — $ 27 $ — $ (35) Nine Months Ended September 30, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (2) 290 (151) 203 (57) — — 285 Rate lock commitments (net) (2)(3) 20 75 245 — — (290) 50 Totals $ 312 $ (76) $ 448 $ (57) $ — $ (290) $ 337 Liabilities DOJ Liability $ (60) $ 25 $ — $ — $ — $ — $ (35) Contingent consideration (6) (5) — — 3 — (8) Totals $ (66) $ 20 $ — $ — $ 3 $ — $ (43) (1) There were no unrealized gains (losses) recorded in OCI during the nine months ended September 30, 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) September 30, 2020 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) 23.1% - 34.7% (28.9%) 1.7%-2.6% (2.2%) (1) Mortgage servicing rights $ 323 Discounted cash flows Option adjusted spread 3.7% - 21.2% (7.6%) 0% - 14.3% (11.4%) $67 - $95 ($82) (1) Rate lock commitments (net) $ 257 Consensus pricing Closing pull-through rate 80.6% - 87.2% (81.9%) (1) Liabilities DOJ Liability $ (35) Discounted cash flows See description below See description below 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%) 13.0% - 19.5% (16.2%) 2.7%-4.0% (3.3%) (1) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 2.4% - 20.4% (5.3%) 0% - 12.3% (10.6%) $67 - $95 ($84) (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 Losses (Dollars in millions) September 30, 2020 Loans held-for-sale (2) $ 14 $ 14 $ — $ (1) Impaired loans held-for-investment (2) Residential first mortgage loans 21 — 21 (3) Repossessed assets (3) 6 — 6 (3) Totals $ 41 $ 14 $ 27 $ (7) 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 dependent upon when certain conditions were met requiring fair value measurement. (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) September 30, 2020 Impaired loans held-for-investment Residential first mortgage loans $ 21 Fair value of collateral Loss severity discount 0% - 100% (12.4%) (1) Repossessed assets $ 6 Fair value of collateral Loss severity discount 0% - 96.3% (31.8%) (1) December 31, 2019 Impaired loans held-for-investment Residential first mortgage loans $ 14 Fair value of collateral Loss severity discount 25% - 30% (25.9%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (17.1%) (1) (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: September 30, 2020 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 280 $ 280 $ 280 $ — $ — Investment securities available-for-sale 2,165 2,165 — 2,165 — Investment securities held-to-maturity 440 458 — 458 — Loans held-for-sale 5,372 5,372 — 5,372 — Loans held-for-investment 16,476 16,266 — 12 16,254 Loans with government guarantees 2,500 2,480 — 2,480 — Mortgage servicing rights 323 323 — — 323 Federal Home Loan Bank stock 377 377 — 377 — Bank owned life insurance 355 355 — 355 — Repossessed assets 6 6 — — 6 Other assets, foreclosure claims 22 22 — 22 — Derivative financial instruments, assets 332 332 — 75 257 Liabilities Retail deposits Demand deposits and savings accounts $ (8,223) $ (7,634) $ — $ (7,634) $ — Certificates of deposit (1,525) (1,539) — (1,539) — Wholesale deposits (1,034) (1,053) — (1,053) — Government deposits (1,748) (1,703) — (1,703) — Company controlled deposits (7,416) (7,377) — (7,377) — Federal Home Loan Bank advances and other (3,426) (3,455) — (3,455) — Long-term debt (493) (449) — (449) — DOJ Liability (35) (35) — — (35) Contingent consideration — — — — — Derivative financial instruments, liabilities (46) (46) — (46) — 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 340 $ 97 $ 899 $ 272 Loans held-for-investment Other noninterest income $ — $ 1 $ — $ 1 Liabilities DOJ Liability Other noninterest income $ — $ — $ — $ 25 |
Differences Between Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance Outstanding | The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected: September 30, 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 $ 6 $ 5 $ (1) $ 3 $ 3 $ — Loans held-for-investment 9 8 (1) 5 4 (1) Total nonaccrual loans $ 15 $ 13 $ (2) $ 8 $ 7 $ (1) Other performing loans Loans held-for-sale $ 5,125 $ 5,344 $ 219 $ 5,057 $ 5,216 $ 159 Loans held-for-investment 6 5 (1) 8 8 — Total other performing loans $ 5,131 $ 5,349 $ 218 $ 5,065 $ 5,224 $ 159 Total loans Loans held-for-sale $ 5,131 $ 5,349 $ 218 $ 5,060 $ 5,219 $ 159 Loans held-for-investment 15 13 (2) 13 12 (1) Total loans $ 5,146 $ 5,362 $ 216 $ 5,073 $ 5,231 $ 158 Liabilities DOJ Liability (1) $ (118) $ (35) $ 83 $ (118) $ (35) $ 83 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 158 $ 49 $ 5 $ (32) $ 180 Provision (benefit) for credit losses (2) (3) — 37 32 Net interest income after provision (benefit) for credit losses 160 52 5 (69) 148 Net gain on loan sales 2 344 — — 346 Loan fees and charges — 29 16 — 45 Net return on mortgage servicing rights — 12 — — 12 Loan administrative (expense) income (1) (10) 40 (3) 26 Other noninterest income 15 3 — 5 23 Total noninterest income 16 378 56 2 452 Compensation and benefits 28 42 12 41 123 Commissions 1 71 — — 72 Loan processing expense 1 15 8 — 24 Other noninterest expense 63 32 21 (30) 86 Total noninterest expense 93 160 41 11 305 Income (loss) before indirect overhead allocations and income taxes 83 270 20 (78) 295 Indirect overhead allocation income (expense) (11) (18) (4) 33 — Provision (benefit) for income taxes 15 53 3 2 73 Net income (loss) $ 57 $ 199 $ 13 $ (47) $ 222 Intersegment (expense) revenue $ (22) $ (12) $ 10 $ 24 $ — Average balances Loans held-for-sale $ — $ 5,602 $ — $ — $ 5,602 Loans with government guarantees — 2,122 — — 2,122 Loans held-for-investment (2) 12,311 2,498 — 30 14,839 Total assets 12,603 11,195 78 4,401 28,277 Deposits 11,265 — 7,329 967 19,561 (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 September 30, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 105 $ 37 $ 5 $ (1) $ 146 Provision (benefit) for credit losses — (2) — 3 1 Net interest income after provision for credit losses 105 39 5 (4) 145 Net gain (loss) on loan sales (4) 114 — — 110 Loan fees and charges — 20 8 1 29 Net return on mortgage servicing rights — (2) — — (2) Loan administrative (expense) income (1) (7) 32 (19) 5 Other noninterest income 18 2 — 9 29 Total noninterest income 13 127 40 (9) 171 Compensation and benefits 27 29 7 35 98 Commissions — 37 — 1 38 Loan processing expense 1 10 10 1 22 Other noninterest expense 42 25 14 (1) 80 Total noninterest expense 70 101 31 36 238 Income (loss) before indirect overhead allocations and income taxes 48 65 14 (49) 78 Indirect overhead allocation income (expense) (10) (10) (4) 24 — Provision (benefit) for income taxes 8 11 2 (6) 15 Net income (loss) $ 30 $ 44 $ 8 $ (19) $ 63 Intersegment (expense) revenue $ (6) $ 8 $ 7 $ (9) $ — Average balances Loans held-for-sale $ 20 $ 3,766 $ — $ — $ 3,786 Loans with government guarantees — 574 — — 574 Loans held-for-investment (2) 11,681 33 — 29 11,743 Total assets 12,184 5,378 38 3,597 21,197 Deposits 10,513 — 4,556 748 15,817 (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. Nine Months Ended September 30, 2020 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 395 $ 147 $ 14 $ (60) $ 496 Provision (benefit) for credit losses 3 (8) — 153 148 Net interest income after provision (benefit) for credit losses 392 155 14 (213) 348 Net gain on loan sales 2 737 — — 739 Loan fees and charges 1 68 43 — 112 Net loss on mortgage servicing rights — 10 — — 10 Loan administrative (expense) income (2) (25) 112 (26) 59 Other noninterest income 43 5 — 20 68 Total noninterest income 44 795 155 (6) 988 Compensation and benefits 79 111 33 118 341 Commissions 2 160 — — 162 Loan processing expense 4 39 24 2 69 Other noninterest expense 231 114 57 (137) 265 Total noninterest expense 316 424 114 (17) 837 Income (loss) before indirect overhead allocations and income taxes 120 526 55 (202) 499 Indirect overhead allocation income (expense) (31) (45) (15) 91 — Provision (benefit) for income taxes 19 101 8 (13) 115 Net income (loss) $ 70 $ 380 $ 32 $ (98) $ 384 Intersegment (expense) revenue $ (97) $ (46) $ 27 $ 116 $ — Average balances Loans held-for-sale $ — $ 5,499 $ — $ — $ 5,499 Loans with government guarantees — 1,267 — — 1,267 Loans held-for-investment (2) 10,702 2,693 — 29 13,424 Total assets 11,100 10,539 65 4,288 25,992 Deposits 10,817 — 6,114 767 17,698 (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. Nine Months Ended September 30, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 296 $ 103 $ 11 $ — $ 410 Provision (benefit) for credit losses 17 (3) — 4 18 Net interest income after provision for credit losses 279 106 11 (4) 392 Net gain (loss) on loan sales (10) 243 — 1 234 Loan fees and charges 1 47 22 — 70 Net return on mortgage servicing rights — 9 — — 9 Loan administrative (expense) income (3) (16) 91 (50) 22 Other noninterest income 46 9 — 58 113 Total noninterest income 34 292 113 9 448 Compensation and benefits 77 79 19 100 275 Commissions 1 75 — — 76 Loan processing expense 5 23 30 2 60 Other noninterest expense 125 63 43 1 232 Total noninterest expense 208 240 92 103 643 Income (loss) before indirect overhead allocations and income taxes 105 158 32 (98) 197 Indirect overhead allocation income (expense) (30) (30) (13) 73 — Provision (benefit) for income taxes 16 26 4 (9) 37 Net income (loss) $ 59 $ 102 $ 15 $ (16) $ 160 Intersegment (expense) revenue $ (14) $ 19 $ 19 $ (24) $ — Average balances Loans held-for-sale $ 37 $ 3,495 $ — $ — $ 3,532 Loans with government guarantees — 511 — — 511 Loans held-for-investment (2) 10,465 22 — 29 10,516 Total assets 10,950 5,018 47 3,862 19,877 Deposits 10,247 — 3,536 522 14,305 (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. |
Investment Securities - Summary
Investment Securities - Summary of Investment Securities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Trading and Available-for-sale Securities [Line Items] | ||
Securities of a single issuer that exceeded 10% of stockholders' equity | $ 0 | $ 0 |
Available-for-sale securities | ||
Amortized Cost | 2,087,000,000 | 2,115,000,000 |
Gross Unrealized Gains | 78,000,000 | 8,000,000 |
Gross Unrealized Losses | 0 | (7,000,000) |
Fair Value | 2,165,000,000 | 2,116,000,000 |
Held-to-maturity securities | ||
Amortized Cost | 440,000,000 | 598,000,000 |
Gross Unrealized Gains | 18,000,000 | 3,000,000 |
Gross Unrealized Losses | 0 | (2,000,000) |
Fair Value | 458,000,000 | 599,000,000 |
Agency - Commercial | ||
Available-for-sale securities | ||
Amortized Cost | 1,126,000,000 | 948,000,000 |
Gross Unrealized Gains | 45,000,000 | 2,000,000 |
Gross Unrealized Losses | 0 | (3,000,000) |
Fair Value | 1,171,000,000 | 947,000,000 |
Held-to-maturity securities | ||
Amortized Cost | 221,000,000 | 306,000,000 |
Gross Unrealized Gains | 8,000,000 | 0 |
Gross Unrealized Losses | 0 | (1,000,000) |
Fair Value | 229,000,000 | 305,000,000 |
Agency - Residential | ||
Available-for-sale securities | ||
Amortized Cost | 806,000,000 | 1,015,000,000 |
Gross Unrealized Gains | 31,000,000 | 4,000,000 |
Gross Unrealized Losses | 0 | (4,000,000) |
Fair Value | 837,000,000 | 1,015,000,000 |
Held-to-maturity securities | ||
Amortized Cost | 219,000,000 | 292,000,000 |
Gross Unrealized Gains | 10,000,000 | 3,000,000 |
Gross Unrealized Losses | 0 | (1,000,000) |
Fair Value | 229,000,000 | 294,000,000 |
Corporate debt obligations | ||
Available-for-sale securities | ||
Amortized Cost | 76,000,000 | 76,000,000 |
Gross Unrealized Gains | 1,000,000 | 1,000,000 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 77,000,000 | 77,000,000 |
Municipal obligations | ||
Available-for-sale securities | ||
Amortized Cost | 29,000,000 | 31,000,000 |
Gross Unrealized Gains | 1,000,000 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 30,000,000 | 31,000,000 |
Other MBS | ||
Available-for-sale securities | ||
Amortized Cost | 49,000,000 | 44,000,000 |
Gross Unrealized Gains | 0 | 1,000,000 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 49,000,000 | 45,000,000 |
Certificate of deposits | ||
Available-for-sale securities | ||
Amortized Cost | 1,000,000 | 1,000,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 1,000,000 | $ 1,000,000 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Percentage of total securities | 94.00% | |
Unrealized credit losses | $ 0 | $ 0 |
Other assets | 1,228,000,000 | 930,000,000 |
Accrued interest receivable on investment securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Other assets | $ 6,000,000 | $ 6,000,000 |
Investment Securities - Availab
Investment Securities - Available-for-Sale Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Purchase of AFS securities | $ 0 | $ 16,000,000 | $ 359,000,000 | $ 39,000,000 |
AFS securities sold | 0 | 0 | 0 | 432,000,000 |
Investment securities pledged | 7,000,000 | 7,000,000 | ||
Flagstar Bancorp, Inc. mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Passive interest in private MBS | $ 0 | $ 0 | $ 18,000,000 | $ 0 |
Investment Securities - Held-to
Investment Securities - Held-to-Maturity Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Held-to-maturity Securities [Line Items] | |||||
Purchase of HTM securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Sale of HTM securities | 0 | $ 0 | 0 | $ 0 | |
Debt securities, available-for-sale, restricted | 7,000,000 | 7,000,000 | |||
Collateral pledged | |||||
Schedule of Held-to-maturity Securities [Line Items] | |||||
Debt securities, available-for-sale, restricted | $ 176,000,000 | $ 176,000,000 | $ 874,000,000 |
Investment Securities - Summa_2
Investment Securities - Summary of Unrealized Loss Positions on Investment Securities (Details) $ in Millions | Sep. 30, 2020USD ($)securities | Dec. 31, 2019USD ($)securities |
Agency - Commercial | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 3 | $ 148 |
Unrealized Loss Position with Duration Under 12 Months | $ 4 | $ 303 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 1 | 17 |
Unrealized Loss Position with Duration Under 12 Months | securities | 1 | 19 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ (3) |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 148 | |
Unrealized Loss Position with Duration Under 12 Months | $ 85 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 13 | |
Unrealized Loss Position with Duration Under 12 Months | securities | 6 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (1) | |
Unrealized Loss Position with Duration Under 12 Months | 0 | |
Municipal obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | 8 |
Unrealized Loss Position with Duration Under 12 Months | $ 6 | $ 0 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 0 | 3 |
Unrealized Loss Position with Duration Under 12 Months | securities | 1 | 0 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ 0 |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Corporate debt obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | |
Unrealized Loss Position with Duration Under 12 Months | $ 13 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 0 | |
Unrealized Loss Position with Duration Under 12 Months | securities | 4 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | |
Unrealized Loss Position with Duration Under 12 Months | 0 | |
Other mortgage-backed securities | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | |
Unrealized Loss Position with Duration Under 12 Months | $ 0 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 0 | |
Unrealized Loss Position with Duration Under 12 Months | securities | 1 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | |
Unrealized Loss Position with Duration Under 12 Months | 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 | securities | 26 | |
Unrealized Loss Position with Duration Under 12 Months | securities | 14 | |
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 | 0 | 35 |
Unrealized Loss Position with Duration Under 12 Months | $ 5 | $ 38 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | securities | 0 | 7 |
Unrealized Loss Position with Duration Under 12 Months | securities | 2 | 10 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ (1) |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Investment Securities Available-for-Sale, Amortized Cost | ||
Due in one year or less | $ 5 | |
Due after one year through five years | 8 | |
Due after five years through 10 years | 108 | |
Due after 10 years | 1,966 | |
Amortized Cost | 2,087 | $ 2,115 |
Investment Securities Available-for-Sale, Estimated Fair Value | ||
Due in one year or less | 5 | |
Due after one year through five years | 8 | |
Due after five years through 10 years | 111 | |
Due after 10 years | 2,041 | |
Fair Value | $ 2,165 | 2,116 |
Investment Securities Available-for-Sale, Weighted Average Yield | ||
Due in one year or less (as a percent) | 2.24% | |
Due after one year through five years (as a percent) | 2.71% | |
Due after five years through 10 years (as a percent) | 4.23% | |
Due after 10 years (as a percent) | 2.38% | |
Investment Securities Held-to-maturity, Amortized cost | ||
Due in one year or less | $ 0 | |
Due after one year through five years | 8 | |
Due after five years through 10 years | 8 | |
Due after 10 years | 424 | |
Amortized Cost | 440 | 598 |
Investment Securities Held-to-maturity, Estimated Fair Value | ||
Due in one year or less | 0 | |
Due after one year through five years | 8 | |
Due after five years through 10 years | 8 | |
Due after 10 years | 442 | |
Fair Value | $ 458 | $ 599 |
Investment Securities Held-to-maturity, Weighted Average Yield | ||
Due in one year or less (as a percent) | 0.00% | |
Due after one year through five years (as a percent) | 2.52% | |
Due after five years through 10 years (as a percent) | 2.35% | |
Due after 10 years (as a percent) | 2.34% |
Loans Held-for-Sale (Details)
Loans Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Net gain on loan sales | $ 346 | $ 110 | $ 739 | $ 234 | |
Loans Held-for-Sale | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans held-for-sale | 5,400 | 5,400 | $ 5,300 | ||
Net gain on loan sales | 344 | $ 110 | 737 | $ 232 | |
LHFS Recorded at Lower of Cost or Fair Value | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans held-for-sale | $ 15 | $ 15 | $ 39 |
Loans Held-for-Investment - Nar
Loans Held-for-Investment - Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended | 18 Months Ended | |||||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Other assets | $ 1,228,000,000 | $ 930,000,000 | ||||||
Loans pledged as collateral | $ 10,700,000,000 | 9,100,000,000 | ||||||
Allowance for credit loss, forecast period | 2 years | |||||||
Allowance for loan loss | $ 255,000,000 | 107,000,000 | $ 229,000,000 | $ 110,000,000 | $ 110,000,000 | $ 128,000,000 | ||
Interest income on nonaccrual loans using cash basis method | 2,000,000 | 1,000,000 | ||||||
Loans 90 days past due and still accruing interest | 0 | 0 | ||||||
Other liabilities | 3,417,000,000 | 1,021,000,000 | ||||||
Unfunded Commitments | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Other liabilities | 25,000,000 | 3,000,000 | ||||||
Forecast | COVID-19 Pandemic | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Unemployment rate (in percentage) | 10.00% | |||||||
Decrease in HPI (in percentage) | 2.00% | |||||||
Accrued interest receivable on loans held-for-investment | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Other assets | $ 41,000,000 | $ 36,900,000 |
Loans Held-for-Investment - Sum
Loans Held-for-Investment - Summary of Loans Held-for-Investment and UPB of Loan Sales and Purchases in the Loans Held-for-Investment Portfolio (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | $ 16,476 | $ 12,129 | |
Total loans sold | 436 | $ 166 | |
Net gain associated with loan sales | 3 | 2 | |
Total loans purchased | 63 | 250 | |
Premium associated with loans purchased | 0 | 9 | |
Performing loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans sold | 436 | 166 | |
Home equity | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans purchased | 0 | 199 | |
Other consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans purchased | 63 | $ 51 | |
Consumer loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 4,369 | 4,907 | |
Consumer loans | Residential first mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 2,472 | 3,154 | |
Consumer loans | Home equity | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 924 | 1,024 | |
Consumer loans | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 973 | 729 | |
Commercial loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 12,107 | 7,222 | |
Commercial loans | Commercial real estate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 2,996 | 2,828 | |
Commercial loans | Commercial and industrial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | 1,520 | 1,634 | |
Commercial loans | Warehouse lending | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held-for-investment | $ 7,591 | $ 2,760 |
Loans Held-for-Investment - Cha
Loans Held-for-Investment - Changes in ALLL by Class of Loan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | $ 229 | $ 110 | $ 107 | $ 128 | $ 128 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||
Provision (benefit) | 28 | 1 | 132 | 18 | |
Charge-offs | (4) | (4) | (12) | (40) | |
Recoveries | 2 | 3 | 5 | 4 | |
Ending allowance balance | 255 | 110 | 255 | 110 | $ 107 |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 23 | ||||
Ending allowance balance | 23 | ||||
Consumer loans | Residential first mortgage loans | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 60 | 26 | 22 | 38 | 38 |
Provision (benefit) | (6) | 2 | 10 | (8) | |
Charge-offs | (2) | (1) | (5) | (3) | |
Recoveries | 0 | 1 | 0 | 1 | |
Ending allowance balance | 52 | 28 | 52 | 28 | 22 |
Consumer loans | Residential first mortgage loans | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 25 | ||||
Ending allowance balance | 25 | ||||
Consumer loans | Home equity | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 28 | 16 | 14 | 15 | 15 |
Provision (benefit) | 1 | 0 | 3 | 0 | |
Charge-offs | (1) | (1) | (3) | (1) | |
Recoveries | 1 | 1 | 3 | 2 | |
Ending allowance balance | 29 | 16 | 29 | 16 | 14 |
Consumer loans | Home equity | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 12 | ||||
Ending allowance balance | 12 | ||||
Consumer loans | Other consumer | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 34 | 5 | 6 | 3 | 3 |
Provision (benefit) | 4 | 3 | 24 | 8 | |
Charge-offs | (1) | (2) | (4) | (5) | |
Recoveries | 1 | 0 | 2 | 0 | |
Ending allowance balance | 38 | 6 | 38 | 6 | 6 |
Consumer loans | Other consumer | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 10 | ||||
Ending allowance balance | 10 | ||||
Commercial loans | Commercial real estate | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 83 | 35 | 38 | 48 | 48 |
Provision (benefit) | 6 | (2) | 65 | (15) | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending allowance balance | 89 | 33 | 89 | 33 | 38 |
Commercial loans | Commercial real estate | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | (14) | ||||
Ending allowance balance | (14) | ||||
Commercial loans | Commercial and industrial | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 23 | 23 | 22 | 18 | 18 |
Provision (benefit) | 19 | (2) | 26 | 34 | |
Charge-offs | 0 | 0 | 0 | (31) | |
Recoveries | 0 | 1 | 0 | 1 | |
Ending allowance balance | 42 | 22 | 42 | 22 | 22 |
Commercial loans | Commercial and industrial | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | (6) | ||||
Ending allowance balance | (6) | ||||
Commercial loans | Warehouse lending | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | 1 | 5 | 5 | 6 | 6 |
Provision (benefit) | 4 | 0 | 4 | (1) | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending allowance balance | $ 5 | $ 5 | 5 | $ 5 | 5 |
Commercial loans | Warehouse lending | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for Loan Losses [Roll Forward] | |||||
Beginning balance | $ (4) | ||||
Ending allowance balance | $ (4) |
Loans Held-for-Investment - Agi
Loans Held-for-Investment - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Loans, Aging [Abstract] | ||
Total past due | $ 59 | $ 40 |
Current | 16,417 | 12,089 |
Total loans | 16,476 | 12,129 |
Loans greater than 90 days past due accounted for under the fair value option | 8 | 4 |
Loans pledged as collateral | 10,700 | 9,100 |
Interest income recognized | 2 | 1 |
Collateral pledged | ||
Loans, Aging [Abstract] | ||
Loans pledged as collateral | 74 | 54 |
30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 9 | 9 |
60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 4 | 5 |
90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 46 | 26 |
Consumer loans | ||
Loans, Aging [Abstract] | ||
Total past due | 49 | 40 |
Current | 4,320 | 4,867 |
Total loans | 4,369 | 4,907 |
Consumer loans | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 9 | 9 |
Consumer loans | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 4 | 5 |
Consumer loans | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 36 | 26 |
Consumer loans | Residential first mortgage loans | ||
Loans, Aging [Abstract] | ||
Total past due | 38 | 30 |
Current | 2,434 | 3,124 |
Total loans | 2,472 | 3,154 |
Consumer loans | Residential first mortgage loans | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 5 | 5 |
Consumer loans | Residential first mortgage loans | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 3 | 4 |
Consumer loans | Residential first mortgage loans | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 30 | 21 |
Consumer loans | Home equity | ||
Loans, Aging [Abstract] | ||
Total past due | 5 | 5 |
Current | 919 | 1,019 |
Total loans | 924 | 1,024 |
Consumer loans | Home equity | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 1 | 1 |
Consumer loans | Home equity | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Consumer loans | Home equity | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 4 | 4 |
Consumer loans | Other | ||
Loans, Aging [Abstract] | ||
Total past due | 6 | 5 |
Current | 967 | 724 |
Total loans | 973 | 729 |
Consumer loans | Other | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 3 | 3 |
Consumer loans | Other | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 1 | 1 |
Consumer loans | Other | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 2 | 1 |
Commercial loans | ||
Loans, Aging [Abstract] | ||
Total past due | 10 | 0 |
Current | 12,097 | 7,222 |
Total loans | 12,107 | 7,222 |
Commercial loans | 30-59 Days Past Due | ||
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 | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 10 | 0 |
Commercial loans | Commercial real estate | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Current | 2,996 | 2,828 |
Total loans | 2,996 | 2,828 |
Commercial loans | Commercial real estate | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Commercial real estate | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Commercial real estate | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Commercial and industrial | ||
Loans, Aging [Abstract] | ||
Total past due | 10 | 0 |
Current | 1,510 | 1,634 |
Total loans | 1,520 | 1,634 |
Commercial loans | Commercial and industrial | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Commercial and industrial | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Commercial and industrial | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 10 | 0 |
Commercial loans | Warehouse lending | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Current | 7,591 | 2,760 |
Total loans | 7,591 | 2,760 |
Commercial loans | Warehouse lending | 30-59 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Warehouse lending | 60-89 Days Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | 0 | 0 |
Commercial loans | Warehouse lending | 90 Days or Greater Past Due | ||
Loans, Aging [Abstract] | ||
Total past due | $ 0 | $ 0 |
Loans Held-for-Investment - S_2
Loans Held-for-Investment - Summary of TDRs by Type and Performing Status and Newly Modified TDRs (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($)loan | Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($)loan | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Troubled Debt Restructurings | ||||||||
TDRs | $ 48 | $ 48 | $ 48 | |||||
Allowance for loan loss | 255 | $ 110 | 255 | $ 110 | $ 229 | 107 | $ 110 | $ 128 |
TDR loans under fair value option | $ 2 | $ 2 | 2 | |||||
Number of Accounts | loan | 3 | 4 | 12 | 10 | ||||
Pre-Modification Unpaid Principal Balance | $ 0 | $ 1 | $ 6 | $ 2 | ||||
Post-Modification Unpaid Principal Balance | 0 | $ 1 | 6 | $ 2 | ||||
Troubled debt restructurings | ||||||||
Troubled Debt Restructurings | ||||||||
Allowance for loan loss | 5 | 5 | 8 | |||||
Performing | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 39 | 39 | 38 | |||||
Nonperforming | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | $ 9 | $ 9 | 10 | |||||
Residential first mortgage loans | ||||||||
Troubled Debt Restructurings | ||||||||
Number of Accounts | loan | 1 | 4 | 6 | 6 | ||||
Pre-Modification Unpaid Principal Balance | $ 0 | $ 1 | $ 1 | $ 1 | ||||
Post-Modification Unpaid Principal Balance | $ 0 | 1 | $ 1 | $ 1 | ||||
Home equity | ||||||||
Troubled Debt Restructurings | ||||||||
Number of Accounts | loan | 1 | 3 | 4 | |||||
Pre-Modification Unpaid Principal Balance | $ 0 | $ 0 | $ 1 | |||||
Post-Modification Unpaid Principal Balance | $ 0 | $ 0 | 1 | |||||
Commercial real estate | ||||||||
Troubled Debt Restructurings | ||||||||
Number of Accounts | loan | 1 | |||||||
Pre-Modification Unpaid Principal Balance | $ 5 | |||||||
Post-Modification Unpaid Principal Balance | $ 5 | |||||||
Consumer | ||||||||
Troubled Debt Restructurings | ||||||||
Number of Accounts | loan | 1 | 2 | ||||||
Pre-Modification Unpaid Principal Balance | $ 0 | $ 0 | ||||||
Post-Modification Unpaid Principal Balance | 0 | 0 | ||||||
Consumer loans | Residential first mortgage loans | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 27 | 27 | 28 | |||||
Allowance for loan loss | 52 | 28 | 52 | 28 | 60 | 22 | 26 | 38 |
Consumer loans | Residential first mortgage loans | Performing | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 20 | 20 | 20 | |||||
Consumer loans | Residential first mortgage loans | Nonperforming | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 7 | 7 | 8 | |||||
Consumer loans | Home equity | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 16 | 16 | 20 | |||||
Allowance for loan loss | 29 | $ 16 | 29 | $ 16 | $ 28 | 14 | $ 16 | $ 15 |
Consumer loans | Home equity | Performing | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 14 | 14 | 18 | |||||
Consumer loans | Home equity | Nonperforming | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 2 | 2 | $ 2 | |||||
Consumer loans | Commercial real estate | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 5 | 5 | ||||||
Consumer loans | Commercial real estate | Performing | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | 5 | 5 | ||||||
Consumer loans | Commercial real estate | Nonperforming | ||||||||
Troubled Debt Restructurings | ||||||||
TDRs | $ 0 | $ 0 |
Loans Held-for-Investment - Loa
Loans Held-for-Investment - Loan Quality Indicators (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 16,476 | $ 12,129 |
Consumer loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 488 | |
2019 | 1,017 | |
2018 | 460 | |
2017 | 363 | |
2016 | 312 | |
Prior | 548 | |
Revolving Loans Amortized Cost Basis | 1,123 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 43 | |
Total | 4,354 | 4,895 |
Total loans | 4,369 | 4,907 |
Consumer loans | Residential first mortgage loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,472 | 3,154 |
Consumer loans | Residential first mortgage loans | Debt-to-Value Ratio, Greater than 90 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 53 | |
2019 | 286 | |
2018 | 142 | |
2017 | 39 | |
2016 | 3 | |
Prior | 21 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 544 | |
Consumer loans | Residential first mortgage loans | Debt-to-Value Ratio, 71-90 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 122 | |
2019 | 213 | |
2018 | 77 | |
2017 | 123 | |
2016 | 82 | |
Prior | 267 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 884 | |
Consumer loans | Residential first mortgage loans | Debt-to-Vale Ratio, 55-70 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 64 | |
2019 | 78 | |
2018 | 29 | |
2017 | 99 | |
2016 | 121 | |
Prior | 140 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 531 | |
Consumer loans | Residential first mortgage loans | Debt-to-Value Ratio, Less than 55 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 17 | |
2019 | 58 | |
2018 | 30 | |
2017 | 91 | |
2016 | 102 | |
Prior | 88 | |
Revolving Loans Amortized Cost Basis | 105 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 9 | |
Total | 500 | |
Consumer loans | Residential first mortgage loans | FICO Score, Greater than 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 151 | |
2019 | 323 | |
2018 | 141 | |
2017 | 241 | |
2016 | 228 | |
Prior | 272 | |
Revolving Loans Amortized Cost Basis | 61 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2 | |
Total | 1,419 | |
Consumer loans | Residential first mortgage loans | FICO Score, 700 to 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 79 | |
2019 | 212 | |
2018 | 106 | |
2017 | 95 | |
2016 | 73 | |
Prior | 148 | |
Revolving Loans Amortized Cost Basis | 30 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 | |
Total | 748 | |
Consumer loans | Residential first mortgage loans | FICO Score, Less than 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 26 | |
2019 | 100 | |
2018 | 31 | |
2017 | 16 | |
2016 | 7 | |
Prior | 96 | |
Revolving Loans Amortized Cost Basis | 14 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2 | |
Total | 292 | |
Consumer loans | Residential first mortgage loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 256 | |
2019 | 630 | |
2018 | 272 | |
2017 | 348 | |
2016 | 308 | |
Prior | 483 | |
Revolving Loans Amortized Cost Basis | 105 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 8 | |
Total | 2,410 | 3,107 |
Consumer loans | Residential first mortgage loans | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 1 | |
2018 | 0 | |
2017 | 2 | |
2016 | 0 | |
Prior | 16 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 19 | 23 |
Consumer loans | Residential first mortgage loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 4 | |
2018 | 6 | |
2017 | 2 | |
2016 | 0 | |
Prior | 17 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 | |
Total | 30 | 15 |
Consumer loans | Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 924 | 1,024 |
Consumer loans | Home equity | Debt-to-Value Ratio, Greater than 90 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 2 | |
2016 | 1 | |
Prior | 11 | |
Revolving Loans Amortized Cost Basis | 1 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 15 | |
Consumer loans | Home equity | Debt-to-Value Ratio, 71-90 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 4 | |
2019 | 29 | |
2018 | 12 | |
2017 | 4 | |
2016 | 1 | |
Prior | 10 | |
Revolving Loans Amortized Cost Basis | 612 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 21 | |
Total | 693 | |
Consumer loans | Home equity | Debt-to-Value Ratio, Less than or Equal to 70 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 8 | |
2018 | 4 | |
2017 | 1 | |
2016 | 0 | |
Prior | 4 | |
Revolving Loans Amortized Cost Basis | 187 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 8 | |
Total | 214 | |
Consumer loans | Home equity | FICO Score, Greater than 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 11 | |
2018 | 6 | |
2017 | 3 | |
2016 | 0 | |
Prior | 7 | |
Revolving Loans Amortized Cost Basis | 358 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 4 | |
Total | 391 | |
Consumer loans | Home equity | FICO Score, 700 to 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 14 | |
2018 | 5 | |
2017 | 3 | |
2016 | 1 | |
Prior | 9 | |
Revolving Loans Amortized Cost Basis | 319 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 14 | |
Total | 367 | |
Consumer loans | Home equity | FICO Score, Less than 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 12 | |
2018 | 5 | |
2017 | 1 | |
2016 | 1 | |
Prior | 9 | |
Revolving Loans Amortized Cost Basis | 123 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 11 | |
Total | 164 | |
Consumer loans | Home equity | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 6 | |
2019 | 37 | |
2018 | 16 | |
2017 | 7 | |
2016 | 2 | |
Prior | 12 | |
Revolving Loans Amortized Cost Basis | 799 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 29 | |
Total | 908 | 1,002 |
Consumer loans | Home equity | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 12 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 12 | 16 |
Consumer loans | Home equity | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 1 | |
Revolving Loans Amortized Cost Basis | 1 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 2 | 3 |
Consumer loans | Other consumer | FICO Score, Greater than 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 160 | |
2019 | 220 | |
2018 | 87 | |
2017 | 1 | |
2016 | 0 | |
Prior | 5 | |
Revolving Loans Amortized Cost Basis | 200 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 | |
Total | 678 | |
Consumer loans | Other consumer | FICO Score, 700 to 750 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 61 | |
2019 | 114 | |
2018 | 65 | |
2017 | 3 | |
2016 | 2 | |
Prior | 2 | |
Revolving Loans Amortized Cost Basis | 18 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 265 | |
Consumer loans | Other consumer | FICO Score, Less than 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 5 | |
2019 | 11 | |
2018 | 14 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total | 30 | |
Consumer loans | Other consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 226 | |
2019 | 345 | |
2018 | 165 | |
2017 | 4 | |
2016 | 2 | |
Prior | 7 | |
Revolving Loans Amortized Cost Basis | 218 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 5 | |
Total | 972 | 727 |
Consumer loans | Other consumer | Watch | ||
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 | 0 | 1 |
Consumer loans | Other consumer | Substandard | ||
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 | 1 | 1 |
Consumer loans | Residential first mortgage and home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 262 | |
2019 | 672 | |
2018 | 294 | |
2017 | 359 | |
2016 | 310 | |
Prior | 541 | |
Revolving Loans Amortized Cost Basis | 905 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 38 | |
Total | 3,381 | |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 510 | |
2019 | 1,558 | |
2018 | 806 | |
2017 | 761 | |
2016 | 470 | |
Prior | 392 | |
Revolving Loans Amortized Cost Basis | 7,610 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 12,107 | 7,222 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,996 | 2,828 |
Commercial loans | Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 249 | |
2019 | 978 | |
2018 | 466 | |
2017 | 452 | |
2016 | 325 | |
Prior | 239 | |
Revolving Loans Amortized Cost Basis | (1) | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 2,708 | 2,794 |
Commercial loans | Commercial real estate | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 20 | |
2019 | 14 | |
2018 | 81 | |
2017 | 44 | |
2016 | 28 | |
Prior | 31 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 218 | 24 |
Commercial loans | Commercial real estate | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 4 | |
2019 | 9 | |
2018 | 16 | |
2017 | 0 | |
2016 | 10 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 39 | 5 |
Commercial loans | Commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 3 | |
2018 | 3 | |
2017 | 25 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 31 | 5 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,520 | 1,634 |
Commercial loans | Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 212 | |
2019 | 494 | |
2018 | 185 | |
2017 | 188 | |
2016 | 107 | |
Prior | 116 | |
Revolving Loans Amortized Cost Basis | 20 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 1,322 | 1,533 |
Commercial loans | Commercial and industrial | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 46 | |
2018 | 26 | |
2017 | 25 | |
2016 | 0 | |
Prior | 1 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 100 | 72 |
Commercial loans | Commercial and industrial | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 13 | |
2018 | 13 | |
2017 | 17 | |
2016 | 0 | |
Prior | 5 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 50 | 24 |
Commercial loans | Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 21 | |
2019 | 1 | |
2018 | 16 | |
2017 | 10 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 0 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 48 | 5 |
Commercial loans | Warehouse loan commitments | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 7,381 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 7,381 | 2,556 |
Commercial loans | Warehouse loan commitments | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 195 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 195 | 189 |
Commercial loans | Warehouse loan commitments | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving Loans Amortized Cost Basis | 15 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 0 | |
Total loans | 15 | 15 |
Commercial loans | Warehouse loan commitments | Substandard | ||
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 | $ 0 |
Loans with Government Guarant_2
Loans with Government Guarantees (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Debt instrument, term | 10 years | |
Repurchase option | $ 1,800 | |
Increase in repurchase option | 1,700 | |
Repossessed assets and associated claims | $ 22 | $ 45 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - entity | Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Servicing Asset at Fair Value [Roll Forward] | ||||
Balance at beginning of period | $ 291 | |||
Fair value of MSRs at end of period | $ 323 | 323 | ||
Residential First Mortgage | ||||
Servicing Asset at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 261 | $ 316 | 291 | $ 290 |
Additions from loans sold with servicing retained | 85 | 39 | 209 | 203 |
Reductions from sales | 0 | (12) | (46) | (57) |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | (25) | (30) | (74) | (60) |
Changes in estimates of fair value due to interest rate risk | 2 | (28) | (57) | (91) |
Fair value of MSRs at end of period | $ 323 | $ 285 | $ 323 | $ 285 |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Actual | ||
Option adjusted spread (as a percent) | 7.61% | 5.34% |
Constant prepayment rate (as a percent) | 11.36% | 10.59% |
Weighted average cost to service per loan (in dollars per share) | $ 81.68 | $ 84.41 |
Fair value impact due to 10% adverse change | ||
Option adjusted spread | $ 316 | $ 284 |
Constant prepayment rate | 300 | 271 |
Weighted average cost to service per loan | 320 | 285 |
Fair value impact due to 20% adverse change | ||
Option adjusted spread | 310 | 280 |
Constant prepayment rate | 279 | 257 |
Weighted average cost to service per loan | $ 316 | $ 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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 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 | $ (25) | $ (30) | $ (74) | $ (60) |
Changes in fair value due to interest rate risk | 2 | (28) | (57) | (91) |
Net return (loss) on mortgage servicing rights | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Servicing fees, ancillary income and late fees | 30 | 25 | 75 | 70 |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | (25) | (30) | (74) | (60) |
Changes in fair value due to interest rate risk | 2 | (28) | (57) | (91) |
Gain on MSR derivatives | 4 | 31 | 68 | 92 |
Net transaction costs | 1 | 0 | (2) | (2) |
Total return (loss) included in net return on mortgage servicing rights | 12 | (2) | 10 | 9 |
Loan administration income on mortgage loans subserviced | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Servicing fees, ancillary income and late fees | 33 | 27 | 94 | 77 |
Charges on subserviced custodial balances | (3) | (20) | (26) | (50) |
Other servicing charges | (4) | (2) | (9) | (5) |
Total income on mortgage loans subserviced, included in loan administration | $ 26 | $ 5 | $ 59 | $ 22 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||||
Unrealized losses on derivatives, net of tax | $ 0 | $ 0 | $ 10,000,000 | $ 0 | $ 0 |
Amount of losses, net of tax, to be reclassified | 4,000,000 | 4,000,000 | |||
Right to reclaim cash | 82,000,000 | 82,000,000 | 63,000,000 | ||
Right to reclaim cash, cash collateral | 56,000,000 | 56,000,000 | 34,000,000 | ||
Right to reclaim cash, maintenance margin | 26,000,000 | 26,000,000 | 29,000,000 | ||
Assets | |||||
Derivative [Line Items] | |||||
Right to reclaim cash | 0 | 0 | |||
Custodial deposits | |||||
Derivative [Line Items] | |||||
Amount of gain (loss) reclassified from AOCI into income | (1,000,000) | (2,000,000) | |||
AFS securities | |||||
Derivative [Line Items] | |||||
Loss on fair value hedge | 1,000,000 | 1,000,000 | |||
Interest rate swaps on AFS securities | |||||
Derivative [Line Items] | |||||
Amount representing designated last of layer | 1,808,000,000 | 1,808,000,000 | 291,000,000 | ||
Amortized cost basis of hedge designated last of layer | 1,805,000,000 | 1,805,000,000 | 289,000,000 | ||
Interest rate swaps on AFS securities | Assets | |||||
Derivative [Line Items] | |||||
Cumulative amount of fair value hedging adjustment included in the carrying amount | 8,000,000 | 8,000,000 | 1,000,000 | ||
Amount representing designated last of layer | 450,000,000 | 450,000,000 | 100,000,000 | ||
Right to reclaim cash | 0 | 0 | |||
Interest rate swaps on AFS securities | Carrying Value | Assets | |||||
Derivative [Line Items] | |||||
Carrying amount of hedged securities | 1,878,000,000 | 1,878,000,000 | |||
FLHB Advances | Carrying Value | Assets | |||||
Derivative [Line Items] | |||||
Carrying amount of hedged securities | 287,000,000 | ||||
Interest rate swaps on HFI residential first mortgages | Assets | |||||
Derivative [Line Items] | |||||
Carrying amount of hedged securities | 255,000,000 | 255,000,000 | $ 0 | ||
Cumulative amount of fair value hedging adjustment included in the carrying amount | $ 1,000,000 | $ 1,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional Amount, Estimated Fair Value and Maturity of Derivative Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives in fair value hedge relationships | ||
Assets | ||
Fair value | $ 1 | |
Liabilities | ||
Fair value | 0 | |
Derivatives in fair value hedge relationships | Assets | ||
Assets | ||
Notional amount | 550 | $ 300 |
Fair value | 0 | 0 |
Derivatives in fair value hedge relationships | Interest rate swaps on custodial deposits | ||
Assets | ||
Fair value | 1 | |
Derivatives in fair value hedge relationships | Interest rate swaps on custodial deposits | Assets | ||
Assets | ||
Notional amount | 800 | 200 |
Fair value | 1 | 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 | Assets | ||
Assets | ||
Notional amount | 450 | 100 |
Fair value | 0 | 0 |
Derivatives in fair value hedge relationships | Interest rate swaps on HFI residential first mortgages | ||
Assets | ||
Fair value | 0 | |
Derivatives in fair value hedge relationships | Interest rate swaps on HFI residential first mortgages | Assets | ||
Assets | ||
Notional amount | 100 | |
Fair value | 0 | |
Derivatives not designated as hedging instruments | ||
Assets | ||
Fair value | 74 | 28 |
Liabilities | ||
Fair value | 46 | 17 |
Derivatives not designated as hedging instruments | Assets | ||
Assets | ||
Notional amount | 17,342 | 7,137 |
Fair value | 331 | 62 |
Derivatives not designated as hedging instruments | Liabilities | ||
Liabilities | ||
Notional amount | 10,207 | 7,640 |
Fair value | 46 | 18 |
Derivatives not designated as hedging instruments | Futures | ||
Assets | ||
Fair value | 0 | |
Derivatives not designated as hedging instruments | Futures | Assets | ||
Assets | ||
Notional amount | 1,132 | 550 |
Fair value | 0 | 0 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | ||
Assets | ||
Fair value | 9 | 2 |
Liabilities | ||
Fair value | 37 | 9 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | Assets | ||
Assets | ||
Notional amount | 3,471 | 1,918 |
Fair value | 9 | 2 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | Liabilities | ||
Liabilities | ||
Notional amount | 8,008 | 5,749 |
Fair value | 37 | 9 |
Derivatives not designated as hedging instruments | Rate lock commitments | Assets | ||
Assets | ||
Notional amount | 12,015 | 3,870 |
Fair value | 257 | 34 |
Derivatives not designated as hedging instruments | Rate lock commitments | Liabilities | ||
Liabilities | ||
Notional amount | 169 | 229 |
Fair value | 0 | 1 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Assets | ||
Fair value | 65 | 26 |
Derivatives not designated as hedging instruments | Interest rate swaps | Assets | ||
Assets | ||
Notional amount | 724 | 799 |
Fair value | 65 | 26 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Liabilities | ||
Fair value | 9 | 8 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | Liabilities | ||
Liabilities | ||
Notional amount | 2,030 | 1,662 |
Fair value | $ 9 | $ 8 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Derivatives Subject to a Master Netting Arrangement (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Liabilities | ||
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | $ 82 | $ 63 |
Derivatives designated as hedging instruments | ||
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 | 12 | |
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 | 0 | |
Derivatives designated as hedging instruments | 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 | 4 | |
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 | 0 | |
Derivatives designated as hedging instruments | Interest rate swaps on custodial deposits | ||
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 | 7 | |
Derivatives designated as hedging instruments | Interest rate swaps on HFI residential first mortgages | ||
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 | 1 | |
Derivatives not designated as hedging instruments | ||
Assets | ||
Gross Amount | 74 | 28 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 74 | 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 | 0 | 0 |
Liabilities | ||
Gross Amount | 46 | 17 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 46 | 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 | 70 | 63 |
Derivatives not designated as hedging instruments | Mortgage-backed securities forwards | ||
Assets | ||
Gross Amount | 9 | 2 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 9 | 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 | 37 | 9 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 37 | 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 | 39 | 24 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Assets | ||
Gross Amount | 65 | 26 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 65 | 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 | 0 | 0 |
Derivatives not designated as hedging instruments | Futures | ||
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 | 0 | |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Liabilities | ||
Gross Amount | 9 | 8 |
Gross Amounts Netted in the Statements of Financial Condition | 0 | 0 |
Net Amount Presented in the Statements of Financial Condition | 9 | 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_6
Derivative Financial Instruments - Net Gain (Loss) Recognized in Income on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative [Line Items] | ||||
Derivative gain (loss) | $ 73 | $ 60 | $ 259 | $ 154 |
Futures | Net gain (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | 0 | 0 | 1 | (2) |
Interest rate swaps and swaptions | Net gain (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | (2) | 28 | 39 | 71 |
Mortgage-backed securities forwards | Net gain (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | 5 | 3 | 28 | 23 |
Rate lock commitments and MSR forwards | Net gain (loss) on loan sales | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | 70 | 27 | 190 | 57 |
Forward commitments | Other noninterest income | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | 0 | 0 | 0 | 2 |
Interest rate swaps | Other noninterest income | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | $ 0 | $ 2 | $ 1 | $ 3 |
Borrowings - Breakdown of FHLB
Borrowings - Breakdown of FHLB Advances Outstanding (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Total short-term Federal Home Loan Bank advances and other borrowings | $ 2,226,000,000 | $ 4,165,000,000 |
Rate | 1.03% | 1.45% |
Long-term Federal Home Loan Bank fixed rate advances | $ 1,200,000,000 | $ 650,000,000 |
Total | 3,426,000,000 | 4,815,000,000 |
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] | ||
Total short-term Federal Home Loan Bank advances and other borrowings | $ 1,555,000,000 | $ 3,695,000,000 |
Rate | 0.20% | 1.61% |
Other short-term borrowings | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Total short-term Federal Home Loan Bank advances and other borrowings | $ 671,000,000 | $ 470,000,000 |
Rate | 0.11% | 1.64% |
Borrowings - Detailed Informati
Borrowings - Detailed Information on FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Disclosure [Abstract] | ||||
Maximum outstanding at any month end | $ 4,388 | $ 2,979 | $ 6,841 | $ 3,391 |
Average outstanding balance | 3,528 | 2,446 | 4,234 | 2,769 |
Average remaining borrowing capacity | $ 5,494 | $ 4,957 | $ 5,249 | $ 3,932 |
Weighted average interest rate | 0.48% | 2.10% | 0.76% | 2.33% |
Borrowings - Maturity Dates of
Borrowings - Maturity Dates of FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2020 | $ 2,226 | |
2021 | 0 | |
2022 | 200 | |
2023 | 500 | |
Thereafter | 500 | |
Total | $ 3,426 | $ 4,815 |
Borrowings - Summary of Long-Te
Borrowings - Summary of Long-Term Debt, Net of Debt Issuance Costs (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Senior notes | $ 246 | $ 249 |
Interest rate | 6.125% | 6.125% |
Trust preferred securities | $ 247 | $ 247 |
Other tong-term debt | 493 | 496 |
3.25%, matures 2032 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 3.48% | 5.20% |
3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 3.53% | 5.24% |
3.25%, matures 2033 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 3.47% | 5.21% |
2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 2.28% | 3.99% |
2.00%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 26 | $ 26 |
Interest rate | 2.28% | 3.99% |
1.75%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 51 | $ 51 |
Interest rate | 2.00% | 3.64% |
1.50%, matures 2035 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 25 | $ 25 |
Interest rate | 1.78% | 3.49% |
1.45%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 25 | $ 25 |
Interest rate | 1.70% | 3.34% |
2.50%, matures 2037 | ||
Debt Instrument [Line Items] | ||
Trust preferred securities | $ 16 | $ 16 |
Interest rate | 2.75% | 4.39% |
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 ($) | Sep. 30, 2020USD ($)trust_subsidiary |
Debt Instrument [Line Items] | ||
Number of trust subsidiaries | trust_subsidiary | 9 | |
Payment of interest on trust preferred securities | $ 0 | |
Senior Notes | Senior Notes Maturing July 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 250,000,000 | |
Debt instrument redemption rate | 100.00% | |
Senior Notes | 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 (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated other comprehensive income (loss) | ||||
Beginning balance | $ 1,788 | $ 1,570 | ||
Other comprehensive income, net of tax | $ 0 | $ 13 | 45 | 52 |
Ending balance | 2,195 | 1,734 | 2,195 | 1,734 |
Investment Securities | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | 56 | (8) | 1 | (47) |
Unrealized gain (loss) | 0 | 18 | 72 | 61 |
Less: Tax provision (benefit) | 0 | 5 | 17 | 15 |
Net unrealized gain (loss) | 0 | 13 | 55 | 46 |
Reclassifications out of AOCI | 0 | 0 | 0 | 7 |
Less: Tax provision | 0 | 0 | 0 | 1 |
Net unrealized gain reclassified out of AOCI | 0 | 0 | 0 | 6 |
Other comprehensive income, net of tax | 0 | 13 | 55 | 52 |
Ending balance | 56 | 5 | 56 | 5 |
Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (10) | 0 | 0 | 0 |
Unrealized gain (loss) | 0 | 0 | (13) | 0 |
Less: Tax provision (benefit) | 0 | 0 | (3) | 0 |
Net unrealized gain (loss) | 0 | 0 | (10) | 0 |
Reclassifications out of AOCI | 0 | 0 | 0 | 0 |
Other comprehensive income, net of tax | 0 | 0 | (10) | 0 |
Ending balance | $ (10) | $ 0 | $ (10) | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 222 | $ 63 | $ 384 | $ 160 |
Weighted Average Shares | ||||
Weighted average common shares outstanding (in shares) | 57,032,746 | 56,484,499 | 56,827,171 | 56,607,944 |
Effect of dilutive securities | ||||
Stock-based awards (in shares) | 347,063 | 626,297 | 404,518 | 644,596 |
Weighted average diluted common shares (in shares) | 57,379,809 | 57,110,796 | 57,231,689 | 57,252,540 |
Earnings per common share | ||||
Basic earnings per common share (in dollars per share) | $ 3.90 | $ 1.12 | $ 6.76 | $ 2.83 |
Effect of dilutive securities | ||||
Stock-based awards (in dollars per share) | (0.02) | (0.01) | (0.05) | (0.03) |
Diluted earnings per common share (in dollars per share) | $ 3.88 | $ 1.11 | $ 6.71 | $ 2.80 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | $ 6 | $ 4 | $ 14 | $ 9 |
2017 ESPP | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation shares authorized (in shares) | 800,000 | 800,000 | ||
Shares available for issuance (in shares) | 382,140 | 382,140 | ||
Shares issued during period (in shares) | 43,946 | 149,789 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units - $ / shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Shares | ||
Non-vested balance at beginning of period (in shares) | 1,412,884 | 1,399,127 |
Granted (in shares) | 7,429 | 378,953 |
Vested (in shares) | (207,046) | (448,452) |
Canceled and forfeited (in shares) | (133,394) | (249,755) |
Weighted — Average Grant-Date Fair Value per Share | ||
Non-vested balance at beginning of period (in dollars per share) | $ 29.72 | $ 28.72 |
Granted (in dollars per share) | 30.96 | 27.96 |
Vested (in dollars per share) | 26.48 | 25.50 |
Canceled and forfeited (in dollars per share) | 22.70 | 22.59 |
Non-vested balance at end of period (in dollars per share) | $ 31.21 | $ 31.21 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 295 | $ 78 | $ 499 | $ 197 |
Provision for income taxes | $ 73 | $ 15 | $ 115 | $ 37 |
Effective tax provision rate | 24.70% | 18.40% | 23.00% | 18.60% |
Unrecognized tax benefits, recognition period | 12 months |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Tier One Leverage Capital | ||
Tier 1 capital actual amount | $ 2,256 | $ 1,720 |
Tier 1 capital (to adjusted tangible assets), actual ratio | 0.080 | 0.076 |
Tier 1 capital, for capital adequacy purposes amount | $ 1,123 | $ 909 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio | 0.040 | 0.040 |
Tier 1 capital capitalized under prompt corrective action provision amount | $ 1,403 | $ 1,136 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 0.050 | 0.050 |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 2,016 | $ 1,480 |
Common equity Tier 1 capital (to RWA), actual ratio | 9.20% | 9.30% |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, amount | $ 985 | $ 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 | $ 1,422 | $ 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 | $ 2,256 | $ 1,720 |
Tier 1 capital (to risk-weighted assets), actual ratio | 0.103 | 0.108 |
Tier 1 capital, for capital adequacy purposes amount | $ 1,313 | $ 953 |
Tier 1 capital (to risk-weighted assets), for capital adequacy purposes ratio | 0.060 | 0.060 |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,751 | $ 1,271 |
Tier 1 capital (to risk-weighted assets), capitalized under prompt corrective action provision ratio | 0.080 | 0.080 |
Capital [Abstract] | ||
Total capital, actual amount | $ 2,471 | $ 1,830 |
Total capital (to risk-weighted assets), actual ratio | 0.113 | 0.115 |
Total capital, for capital adequacy purposes amount | $ 1,751 | $ 1,271 |
Total capital (to risk-weighted assets), for capital adequacy purposes ratio | 0.080 | 0.080 |
Total capital, capitalized under prompt corrective action provisions amount | $ 2,188 | $ 1,589 |
Total capital (to risk-weighted assets), capitalized under prompt corrective action provisions ratio | 0.100 | 0.100 |
Bank | ||
Tier One Leverage Capital | ||
Tier 1 capital actual amount | $ 2,212 | $ 1,752 |
Tier 1 capital (to adjusted tangible assets), actual ratio | 0.079 | 0.077 |
Tier 1 capital, for capital adequacy purposes amount | $ 1,122 | $ 909 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio | 0.040 | 0.040 |
Tier 1 capital capitalized under prompt corrective action provision amount | $ 1,403 | $ 1,136 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 0.050 | 0.050 |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 2,212 | $ 1,752 |
Common equity Tier 1 capital (to RWA), actual ratio | 10.10% | 11.00% |
Common equity Tier 1 capital (to RWA), for capital adequacy purposes, amount | $ 985 | $ 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 | $ 1,422 | $ 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 | $ 2,212 | $ 1,752 |
Tier 1 capital (to risk-weighted assets), actual ratio | 0.101 | 0.110 |
Tier 1 capital, for capital adequacy purposes amount | $ 1,313 | $ 952 |
Tier 1 capital (to risk-weighted assets), for capital adequacy purposes ratio | 0.060 | 0.060 |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,751 | $ 1,270 |
Tier 1 capital (to risk-weighted assets), capitalized under prompt corrective action provision ratio | 0.080 | 0.080 |
Capital [Abstract] | ||
Total capital, actual amount | $ 2,427 | $ 1,862 |
Total capital (to risk-weighted assets), actual ratio | 0.111 | 0.117 |
Total capital, for capital adequacy purposes amount | $ 1,751 | $ 1,270 |
Total capital (to risk-weighted assets), for capital adequacy purposes ratio | 0.080 | 0.080 |
Total capital, capitalized under prompt corrective action provisions amount | $ 2,188 | $ 1,587 |
Total capital (to risk-weighted assets), capitalized under prompt corrective action provisions ratio | 0.100 | 0.100 |
Legal Proceedings, Contingenc_3
Legal Proceedings, Contingencies and Commitments - Narrative (Details) $ in Millions | Feb. 24, 2012USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 31, 2018USD ($) |
Loss Contingencies | ||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 0.050 | 0.050 | ||
Tier 1 capital (to adjusted tangible assets), actual ratio | 0.080 | 0.076 | ||
Business acquisition threshold (as a percent) | 33.30% | |||
Accrued reserve for contingent liabilities | $ 7 | $ 3 | ||
SERP | CEO | ||||
Loss Contingencies | ||||
SERP Liability | $ 16 | $ 16 | ||
Bank | ||||
Loss Contingencies | ||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 0.050 | 0.050 | ||
Tier 1 capital (to adjusted tangible assets), actual ratio | 0.079 | 0.077 | ||
DOJ Agreement | ||||
Loss Contingencies | ||||
Litigation settlement payment amount | $ 118 | |||
Accrued reserve for contingent liabilities | $ 35 | |||
DOJ Agreement | Bank | ||||
Loss Contingencies | ||||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio | 0.11 | |||
Tier 1 capital (to adjusted tangible assets), actual ratio | 0.11 | |||
DOJ Agreement | Subsequent Payments | ||||
Loss Contingencies | ||||
Litigation expense (up to) | $ 25 |
Legal Proceedings, Contingenc_4
Legal Proceedings, Contingencies and Commitments - Summary of the Contractual Amount of Significant Commitments (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Mortgage loan commitments including interest-rate locks | ||
Loss Contingencies | ||
Commitments to extend credit | $ 12,257 | $ 4,099 |
Warehouse loan commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 2,218 | 1,944 |
Commercial and industrial commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 1,207 | 1,107 |
Other commercial commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 1,653 | 2,015 |
HELOC commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 562 | 558 |
Other consumer commitments | ||
Loss Contingencies | ||
Commitments to extend credit | 301 | 175 |
Standby and commercial letters of credit | ||
Loss Contingencies | ||
Commitments to extend credit | $ 97 | $ 82 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Carried at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Investment securities available-for-sale | $ 2,165 | $ 2,116 |
Loans held-for-sale, fair value | 5,349 | 5,219 |
Loans held-for-investment | 14 | 12 |
Mortgage servicing rights | 323 | 291 |
Total assets at fair value | 5,362 | 5,231 |
Agency - Commercial | ||
Assets | ||
Investment securities available-for-sale | 1,171 | 947 |
Agency - Residential | ||
Assets | ||
Investment securities available-for-sale | 837 | 1,015 |
Municipal obligations | ||
Assets | ||
Investment securities available-for-sale | 30 | 31 |
Corporate debt obligations | ||
Assets | ||
Investment securities available-for-sale | 77 | 77 |
Certificates of deposit | ||
Assets | ||
Investment securities available-for-sale | 1 | 1 |
Estimate of Fair Value Measurement | ||
Assets | ||
Investment securities available-for-sale | 2,165 | 2,116 |
Loans held-for-sale, fair value | 5,372 | 5,258 |
Loans held-for-investment | 16,266 | 12,031 |
Mortgage servicing rights | 323 | 291 |
Liabilities | ||
Contingent consideration | 0 | (10) |
Level 1 | Estimate of Fair Value Measurement | ||
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 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Level 2 | Estimate of Fair Value Measurement | ||
Assets | ||
Investment securities available-for-sale | 2,165 | 2,116 |
Loans held-for-sale, fair value | 5,372 | 5,258 |
Loans held-for-investment | 12 | 10 |
Mortgage servicing rights | 0 | 0 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Level 3 | Estimate of Fair Value Measurement | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 16,254 | 12,021 |
Mortgage servicing rights | 323 | 291 |
Liabilities | ||
Contingent consideration | 0 | (10) |
Recurring | Estimate of Fair Value Measurement | ||
Assets | ||
Mortgage servicing rights | 323 | 291 |
Total assets at fair value | 8,183 | 7,700 |
Liabilities | ||
DOJ Liability | (35) | (35) |
Total liabilities at fair value | (81) | (63) |
Recurring | Estimate of Fair Value Measurement | Rate lock commitments | ||
Assets | ||
Derivative assets | 257 | 34 |
Liabilities | ||
Derivative liabilities | (1) | |
Recurring | Estimate of Fair Value Measurement | Futures | ||
Assets | ||
Derivative assets | 0 | |
Recurring | Estimate of Fair Value Measurement | Mortgage-backed securities forwards | ||
Assets | ||
Derivative assets | 9 | 2 |
Liabilities | ||
Derivative liabilities | (37) | (9) |
Recurring | Estimate of Fair Value Measurement | Interest rate swaps and swaptions | ||
Assets | ||
Derivative assets | 66 | 26 |
Recurring | Estimate of Fair Value Measurement | Interest rate swaps | ||
Liabilities | ||
Derivative liabilities | (9) | (8) |
Recurring | Estimate of Fair Value Measurement | Contingent consideration | ||
Liabilities | ||
Contingent consideration | (10) | |
Recurring | Estimate of Fair Value Measurement | Residential first mortgage loans | ||
Assets | ||
Loans held-for-sale, fair value | 5,349 | 5,219 |
Loans held-for-investment | 12 | 10 |
Recurring | Estimate of Fair Value Measurement | Home equity | ||
Assets | ||
Loans held-for-investment | 2 | 2 |
Recurring | Estimate of Fair Value Measurement | Agency - Commercial | ||
Assets | ||
Investment securities available-for-sale | 1,171 | 947 |
Recurring | Estimate of Fair Value Measurement | Agency - Residential | ||
Assets | ||
Investment securities available-for-sale | 837 | 1,015 |
Recurring | Estimate of Fair Value Measurement | Municipal obligations | ||
Assets | ||
Investment securities available-for-sale | 30 | 31 |
Recurring | Estimate of Fair Value Measurement | Corporate debt obligations | ||
Assets | ||
Investment securities available-for-sale | 77 | 77 |
Recurring | Estimate of Fair Value Measurement | Other MBS | ||
Assets | ||
Investment securities available-for-sale | 49 | 45 |
Recurring | Estimate of Fair Value Measurement | Certificates of deposit | ||
Assets | ||
Investment securities available-for-sale | 1 | 1 |
Recurring | Level 1 | ||
Assets | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
DOJ Liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Recurring | Level 1 | Rate lock commitments | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Futures | ||
Assets | ||
Derivative assets | 0 | |
Recurring | Level 1 | Mortgage-backed securities forwards | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate swaps and swaptions | ||
Assets | ||
Derivative assets | 0 | 0 |
Recurring | Level 1 | Interest rate swaps | ||
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Contingent consideration | ||
Liabilities | ||
Contingent consideration | 0 | |
Recurring | Level 1 | Residential first mortgage loans | ||
Assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Home equity | ||
Assets | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Agency - Commercial | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Agency - Residential | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Municipal obligations | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Corporate debt obligations | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Other MBS | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Certificates of deposit | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 2 | ||
Assets | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 7,601 | 7,373 |
Liabilities | ||
DOJ Liability | 0 | 0 |
Total liabilities at fair value | (46) | (17) |
Recurring | Level 2 | Rate lock commitments | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Futures | ||
Assets | ||
Derivative assets | 0 | |
Recurring | Level 2 | Mortgage-backed securities forwards | ||
Assets | ||
Derivative assets | 9 | 2 |
Liabilities | ||
Derivative liabilities | (37) | (9) |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Assets | ||
Derivative assets | 66 | 26 |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities | ||
Derivative liabilities | (9) | (8) |
Recurring | Level 2 | Contingent consideration | ||
Liabilities | ||
Contingent consideration | 0 | |
Recurring | Level 2 | Residential first mortgage loans | ||
Assets | ||
Loans held-for-sale, fair value | 5,349 | 5,219 |
Loans held-for-investment | 12 | 10 |
Recurring | Level 2 | Home equity | ||
Assets | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 2 | Agency - Commercial | ||
Assets | ||
Investment securities available-for-sale | 1,171 | 947 |
Recurring | Level 2 | Agency - Residential | ||
Assets | ||
Investment securities available-for-sale | 837 | 1,015 |
Recurring | Level 2 | Municipal obligations | ||
Assets | ||
Investment securities available-for-sale | 30 | 31 |
Recurring | Level 2 | Corporate debt obligations | ||
Assets | ||
Investment securities available-for-sale | 77 | 77 |
Recurring | Level 2 | Other MBS | ||
Assets | ||
Investment securities available-for-sale | 49 | 45 |
Recurring | Level 2 | Certificates of deposit | ||
Assets | ||
Investment securities available-for-sale | 1 | 1 |
Recurring | Level 3 | ||
Assets | ||
Mortgage servicing rights | 323 | 291 |
Total assets at fair value | 582 | 327 |
Liabilities | ||
DOJ Liability | (35) | (35) |
Total liabilities at fair value | (35) | (46) |
Recurring | Level 3 | Rate lock commitments | ||
Assets | ||
Derivative assets | 257 | 34 |
Liabilities | ||
Derivative liabilities | (1) | |
Recurring | Level 3 | Futures | ||
Assets | ||
Derivative assets | 0 | |
Recurring | Level 3 | Mortgage-backed securities forwards | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Interest rate swaps and swaptions | ||
Assets | ||
Derivative assets | 0 | 0 |
Recurring | Level 3 | Interest rate swaps | ||
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Contingent consideration | ||
Liabilities | ||
Contingent consideration | (10) | |
Recurring | Level 3 | Residential first mortgage loans | ||
Assets | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 3 | Home equity | ||
Assets | ||
Loans held-for-investment | 2 | 2 |
Recurring | Level 3 | Agency - Commercial | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Agency - Residential | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Municipal obligations | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Corporate debt obligations | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Other MBS | ||
Assets | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Certificates of deposit | ||
Assets | ||
Investment securities available-for-sale | $ 0 | $ 0 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward of Financial Instruments Classified as Level 3 (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Liabilities | ||||
Unrealized gains (losses) recorded in OCI | $ 0 | $ 0 | $ 0 | $ 0 |
Recurring | Level 3 | ||||
Assets | ||||
Balance at Beginning of Period | 468,000,000 | 368,000,000 | 327,000,000 | 312,000,000 |
Total Gains (Losses) Recorded in Earnings | 67,000,000 | (38,000,000) | 143,000,000 | (76,000,000) |
Purchases / Closings | 418,000,000 | 152,000,000 | 1,014,000,000 | 448,000,000 |
Sales | 0 | (12,000,000) | (46,000,000) | (57,000,000) |
Settlement | 0 | 0 | 0 | 0 |
Transfers Out | (371,000,000) | (133,000,000) | (856,000,000) | (290,000,000) |
Balance at End of Period | 582,000,000 | 337,000,000 | 582,000,000 | 337,000,000 |
Liabilities | ||||
Balance at Beginning of Period | (62,000,000) | (42,000,000) | (45,000,000) | (66,000,000) |
Total Gains (Losses) Recorded in Earnings | 0 | (4,000,000) | (17,000,000) | 20,000,000 |
Purchases / Closings | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlement | 27,000,000 | 3,000,000 | 27,000,000 | 3,000,000 |
Transfers Out | 0 | 0 | 0 | 0 |
Balance at End of Period | (35,000,000) | (43,000,000) | (35,000,000) | (43,000,000) |
Recurring | Level 3 | Home equity | ||||
Assets | ||||
Balance at Beginning of Period | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 |
Total Gains (Losses) Recorded in Earnings | 0 | 0 | 0 | 0 |
Purchases / Closings | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 | 0 |
Transfers Out | 0 | 0 | 0 | 0 |
Balance at End of Period | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 |
Recurring | Level 3 | Mortgage servicing rights | ||||
Assets | ||||
Balance at Beginning of Period | 261,000,000 | 316,000,000 | 291,000,000 | 290,000,000 |
Total Gains (Losses) Recorded in Earnings | (23,000,000) | (58,000,000) | (131,000,000) | (151,000,000) |
Purchases / Closings | 85,000,000 | 39,000,000 | 209,000,000 | 203,000,000 |
Sales | 0 | (12,000,000) | (46,000,000) | (57,000,000) |
Settlement | 0 | 0 | 0 | 0 |
Transfers Out | 0 | 0 | 0 | 0 |
Balance at End of Period | 323,000,000 | 285,000,000 | 323,000,000 | 285,000,000 |
Recurring | Level 3 | Rate lock commitments | ||||
Assets | ||||
Balance at Beginning of Period | 205,000,000 | 50,000,000 | 34,000,000 | 20,000,000 |
Total Gains (Losses) Recorded in Earnings | 90,000,000 | 20,000,000 | 274,000,000 | 75,000,000 |
Purchases / Closings | 333,000,000 | 113,000,000 | 805,000,000 | 245,000,000 |
Sales | 0 | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 | 0 |
Transfers Out | (371,000,000) | (133,000,000) | (856,000,000) | (290,000,000) |
Balance at End of Period | 257,000,000 | 50,000,000 | 257,000,000 | 50,000,000 |
Recurring | Level 3 | DOJ Liability | ||||
Liabilities | ||||
Balance at Beginning of Period | (35,000,000) | (35,000,000) | (35,000,000) | (60,000,000) |
Total Gains (Losses) Recorded in Earnings | 0 | 0 | 0 | 25,000,000 |
Purchases / Closings | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 | 0 |
Transfers Out | 0 | 0 | 0 | 0 |
Balance at End of Period | (35,000,000) | (35,000,000) | (35,000,000) | (35,000,000) |
Recurring | Level 3 | Contingent consideration | ||||
Liabilities | ||||
Balance at Beginning of Period | (27,000,000) | (7,000,000) | (10,000,000) | (6,000,000) |
Total Gains (Losses) Recorded in Earnings | 0 | (4,000,000) | (17,000,000) | (5,000,000) |
Purchases / Closings | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlement | 27,000,000 | 3,000,000 | 27,000,000 | 3,000,000 |
Transfers Out | 0 | 0 | 0 | 0 |
Balance at End of Period | $ 0 | $ (8,000,000) | $ 0 | $ (8,000,000) |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information about Recurring Level 3 Fair Value Instruments (Details) - Level 3 - Fair Value $ in Millions | Sep. 30, 2020USD ($)constantPrepaymentRatePerLoanconstant_default_rate_per_loanorginationPull-throughRatePerLoan$ / loandiscountRatePerLoanoptionAdjustedSpreadPerLoan | Dec. 31, 2019USD ($)optionAdjustedSpreadPerLoanorginationPull-throughRatePerLoanconstantPrepaymentRatePerLoanconstant_default_rate_per_loan$ / loandiscountRatePerLoan |
Home equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held-for-investment | $ | $ 2 | $ 2 |
Home equity | Discount rate | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discountRatePerLoan | 0.072 | 0.072 |
Home equity | Discount rate | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discountRatePerLoan | 0.108 | 0.108 |
Home equity | Discount rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | discountRatePerLoan | 0.090 | 0.090 |
Home equity | Constant prepayment rate | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constantPrepaymentRatePerLoan | 0.231 | 0.130 |
Home equity | Constant prepayment rate | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constantPrepaymentRatePerLoan | 0.347 | 0.195 |
Home equity | Constant prepayment rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, fair value input (in percentage) | constantPrepaymentRatePerLoan | 0.289 | 0.162 |
Home equity | Constant default rate | Lower range | ||
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 | 0.017 | 0.027 |
Home equity | Constant default rate | Upper range | ||
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 | 0.026 | 0.040 |
Home equity | Constant default rate | Weighted average | ||
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 | 0.033 |
Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset | $ | $ 323 | $ 291 |
Mortgage servicing rights | Constant prepayment rate | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constantPrepaymentRatePerLoan | 0 | 0 |
Mortgage servicing rights | Constant prepayment rate | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constantPrepaymentRatePerLoan | 0.143 | 0.123 |
Mortgage servicing rights | Constant prepayment rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | constantPrepaymentRatePerLoan | 0.114 | 0.106 |
Mortgage servicing rights | Option adjusted spread | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | optionAdjustedSpreadPerLoan | 0.037 | 0.024 |
Mortgage servicing rights | Option adjusted spread | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | optionAdjustedSpreadPerLoan | 0.212 | 0.204 |
Mortgage servicing rights | Option adjusted spread | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | optionAdjustedSpreadPerLoan | 0.076 | 0.053 |
Mortgage servicing rights | Weighted average cost to service per loan | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 67 | 67 |
Mortgage servicing rights | Weighted average cost to service per loan | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 95 | 95 |
Mortgage servicing rights | Weighted average cost to service per loan | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset, measurement input | $ / loan | 82 | 84 |
Rate lock commitments (net) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ | $ 257 | $ 34 |
Rate lock commitments (net) | Closing pull-through rate | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.806 | |
Rate lock commitments (net) | Closing pull-through rate | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.872 | |
Rate lock commitments (net) | Closing pull-through rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.819 | |
Rate lock commitments (net) | Origination pull-through rate | Lower range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.800 | |
Rate lock commitments (net) | Origination pull-through rate | Upper range | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.872 | |
Rate lock commitments (net) | Origination pull-through rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset, measurement input (in percentage) | orginationPull-throughRatePerLoan | 0.815 | |
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 | $ | $ (10) |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Settlement liability | $ 7 | $ 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 10 months 24 days | 4 years 1 month 6 days |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on Nonrecurring Basis (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | $ 5,349 | $ 5,349 | $ 5,219 | ||
Total assets at fair value | 5,362 | 5,362 | 5,231 | ||
Net gain on loan sales | 346 | $ 110 | 739 | $ 234 | |
Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 14 | 14 | 6 | ||
Total assets at fair value | 41 | 41 | 30 | ||
Fair value gains (losses) on loans | (1) | (1) | |||
Net gain on loan sales | (7) | (9) | |||
Nonrecurring | Residential first mortgage loans | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impaired loans held-for-investment | 21 | 21 | 14 | ||
Fair value gains (losses) on loans | (3) | (5) | |||
Nonrecurring | Repossessed assets | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | 6 | 6 | 10 | ||
Fair value gains (losses) on repossessed assets | (3) | (3) | |||
Nonrecurring | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 14 | 14 | 6 | ||
Total assets at fair value | 14 | 14 | 6 | ||
Nonrecurring | Level 2 | Residential first mortgage loans | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impaired loans held-for-investment | 0 | 0 | 0 | ||
Nonrecurring | Level 2 | Repossessed assets | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | 0 | 0 | 0 | ||
Nonrecurring | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 0 | 0 | 0 | ||
Total assets at fair value | 27 | 27 | 24 | ||
Nonrecurring | Level 3 | Residential first mortgage loans | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impaired loans held-for-investment | 21 | 21 | 14 | ||
Nonrecurring | Level 3 | Repossessed assets | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | $ 6 | $ 6 | $ 10 |
Fair Value Measurements - Qua_2
Fair Value Measurements - Quantitative Information about Nonrecurring Level 3 Fair Value Financial Instruments and the Fair Value Measurements (Details) - Nonrecurring - Level 3 $ in Millions | Sep. 30, 2020USD ($)loss_severity_discount_per_loan | Dec. 31, 2019USD ($)loss_severity_discount_per_loan |
Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ | $ 21 | $ 14 |
Residential first mortgage loans | Lower range | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0 | 0.25 |
Residential first mortgage loans | Upper range | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 1 | 0.30 |
Residential first mortgage loans | Weighted average | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.124 | 0.259 |
Repossessed assets | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ | $ 6 | $ 10 |
Repossessed assets | Lower range | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Other real estate owned, fair value input (in percentage) | 0 | 0 |
Repossessed assets | Upper range | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Other real estate owned, fair value input (in percentage) | 0.963 | 1 |
Repossessed assets | Weighted average | Loss severity discount | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Other real estate owned, fair value input (in percentage) | 0.318 | 0.171 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Investment securities available-for-sale | $ 2,165 | $ 2,116 |
Investment securities held-to-maturity | 458 | 599 |
Loans held-for-sale | 5,349 | 5,219 |
Loans held-for-investment | 14 | 12 |
Mortgage servicing rights | 323 | 291 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 280 | 426 |
Investment securities available-for-sale | 2,165 | 2,116 |
Investment securities held-to-maturity | 440 | 598 |
Loans held-for-sale | 5,372 | 5,258 |
Loans held-for-investment | 16,476 | 12,129 |
Loans with government guarantees | 2,500 | 736 |
Mortgage servicing rights | 323 | 291 |
Federal Home Loan Bank stock | 377 | 303 |
Bank owned life insurance | 355 | 349 |
Repossessed assets | 6 | 10 |
Other assets, foreclosure claims | 22 | 45 |
Derivative financial instruments, assets | 332 | 62 |
Liabilities | ||
Federal Home Loan Bank advances and other | (3,426) | (4,815) |
Long-term debt | (493) | (496) |
DOJ Liability | (35) | (35) |
Contingent consideration | 0 | (10) |
Derivative financial instruments, liabilities | (46) | (18) |
Carrying Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (8,223) | (6,811) |
Carrying Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,525) | (2,353) |
Carrying Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (1,034) | (633) |
Carrying Value | Government deposits | ||
Liabilities | ||
Deposits | (1,748) | (1,213) |
Carrying Value | Company controlled deposits | ||
Liabilities | ||
Deposits | (7,416) | |
Carrying Value | Custodial deposits | ||
Liabilities | ||
Deposits | (4,136) | |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 280 | 426 |
Investment securities available-for-sale | 2,165 | 2,116 |
Investment securities held-to-maturity | 458 | 599 |
Loans held-for-sale | 5,372 | 5,258 |
Loans held-for-investment | 16,266 | 12,031 |
Loans with government guarantees | 2,480 | 707 |
Mortgage servicing rights | 323 | 291 |
Federal Home Loan Bank stock | 377 | 303 |
Bank owned life insurance | 355 | 349 |
Repossessed assets | 6 | 10 |
Other assets, foreclosure claims | 22 | 45 |
Derivative financial instruments, assets | 332 | 88 |
Liabilities | ||
Federal Home Loan Bank advances and other | (3,455) | (4,816) |
Long-term debt | (449) | (462) |
DOJ Liability | (35) | (35) |
Contingent consideration | 0 | (10) |
Derivative financial instruments, liabilities | (46) | (44) |
Estimated Fair Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (7,634) | (6,050) |
Estimated Fair Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,539) | (2,368) |
Estimated Fair Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (1,053) | (640) |
Estimated Fair Value | Government deposits | ||
Liabilities | ||
Deposits | (1,703) | (1,156) |
Estimated Fair Value | Company controlled deposits | ||
Liabilities | ||
Deposits | (7,377) | |
Estimated Fair Value | Custodial deposits | ||
Liabilities | ||
Deposits | (4,066) | |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 280 | 426 |
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 and other | 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 | Company controlled deposits | ||
Liabilities | ||
Deposits | 0 | |
Estimated Fair Value | Level 1 | Custodial deposits | ||
Liabilities | ||
Deposits | 0 | |
Estimated Fair Value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 2,165 | 2,116 |
Investment securities held-to-maturity | 458 | 599 |
Loans held-for-sale | 5,372 | 5,258 |
Loans held-for-investment | 12 | 10 |
Loans with government guarantees | 2,480 | 707 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 377 | 303 |
Bank owned life insurance | 355 | 349 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 22 | 45 |
Derivative financial instruments, assets | 75 | 54 |
Liabilities | ||
Federal Home Loan Bank advances and other | (3,455) | (4,816) |
Long-term debt | (449) | (462) |
DOJ Liability | 0 | 0 |
Contingent consideration | 0 | 0 |
Derivative financial instruments, liabilities | (46) | (43) |
Estimated Fair Value | Level 2 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (7,634) | (6,050) |
Estimated Fair Value | Level 2 | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,539) | (2,368) |
Estimated Fair Value | Level 2 | Wholesale deposits | ||
Liabilities | ||
Deposits | (1,053) | (640) |
Estimated Fair Value | Level 2 | Government deposits | ||
Liabilities | ||
Deposits | (1,703) | (1,156) |
Estimated Fair Value | Level 2 | Company controlled deposits | ||
Liabilities | ||
Deposits | (7,377) | |
Estimated Fair Value | Level 2 | Custodial deposits | ||
Liabilities | ||
Deposits | (4,066) | |
Estimated Fair Value | Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Investment securities held-to-maturity | 0 | 0 |
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 16,254 | 12,021 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 323 | 291 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 6 | 10 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 257 | 34 |
Liabilities | ||
Federal Home Loan Bank advances and other | 0 | 0 |
Long-term debt | 0 | 0 |
DOJ Liability | (35) | (35) |
Contingent consideration | 0 | (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 | Company controlled deposits | ||
Liabilities | ||
Deposits | $ 0 | |
Estimated Fair Value | Level 3 | Custodial deposits | ||
Liabilities | ||
Deposits | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loans held-for-sale | Net gain on loan sales | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Change in fair value included in earnings | $ 340 | $ 97 | $ 899 | $ 272 |
Loans held-for-investment | Other noninterest income | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Change in fair value included in earnings | 0 | 1 | 0 | 1 |
DOJ Liability | Other noninterest income | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Change in fair value included in earnings | $ 0 | $ 0 | $ 0 | $ 25 |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | $ 5,146 | $ 5,073 | |
Total assets at fair value | 5,362 | 5,231 | |
Assets, fair value over/(under) UPB | 216 | 158 | |
Litigation settlement | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Litigation settlement payment amount | $ 118 | ||
Nonaccrual loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 15 | 8 | |
Total assets at fair value | 13 | 7 | |
Assets, fair value over/(under) UPB | (2) | (1) | |
Other performing loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 5,131 | 5,065 | |
Total assets at fair value | 5,349 | 5,224 | |
Assets, fair value over/(under) UPB | 218 | 159 | |
Loans held-for-sale | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 5,131 | 5,060 | |
Total assets at fair value | 5,349 | 5,219 | |
Assets, fair value over/(under) UPB | 218 | 159 | |
Loans held-for-sale | Nonaccrual loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 6 | 3 | |
Total assets at fair value | 5 | 3 | |
Assets, fair value over/(under) UPB | (1) | 0 | |
Loans held-for-sale | Other performing loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 5,125 | 5,057 | |
Total assets at fair value | 5,344 | 5,216 | |
Assets, fair value over/(under) UPB | 219 | 159 | |
Loans held-for-investment | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 15 | 13 | |
Total assets at fair value | 13 | 12 | |
Assets, fair value over/(under) UPB | (2) | (1) | |
Loans held-for-investment | Nonaccrual loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 9 | 5 | |
Total assets at fair value | 8 | 4 | |
Assets, fair value over/(under) UPB | (1) | (1) | |
Loans held-for-investment | Other performing loans | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, unpaid principal balance (UPB) | 6 | 8 | |
Total assets at fair value | 5 | 8 | |
Assets, fair value over/(under) UPB | (1) | 0 | |
DOJ Liability | |||
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 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segments | Sep. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segments | 3 | |||
Summary of Operations | ||||
Net interest income | $ 180 | $ 146 | $ 496 | $ 410 |
Provision (benefit) for credit losses | 32 | 1 | 148 | 18 |
Net interest income after provision for credit losses | 148 | 145 | 348 | 392 |
Net gain on loan sales | 346 | 110 | 739 | 234 |
Loan fees and charges | 45 | 29 | 112 | 70 |
Net return on mortgage servicing rights | 12 | (2) | 10 | 9 |
Loan administrative (expense) income | 26 | 5 | 59 | 22 |
Other noninterest income | 23 | 29 | 68 | 113 |
Total noninterest income | 452 | 171 | 988 | 448 |
Compensation and benefits | 123 | 98 | 341 | 275 |
Commissions | 72 | 38 | 162 | 76 |
Loan processing expense | 24 | 22 | 69 | 60 |
Other noninterest expense | 86 | 80 | 265 | 232 |
Total noninterest expense | 305 | 238 | 837 | 643 |
Income (loss) before indirect overhead allocations and income taxes | 295 | 78 | 499 | 197 |
Indirect overhead allocation income (expense) | 0 | 0 | 0 | 0 |
Provision (benefit) for income taxes | 73 | 15 | 115 | 37 |
Net income | 222 | 63 | 384 | 160 |
Average balances | ||||
Loans held-for-sale | 5,602 | 3,786 | 5,499 | 3,532 |
Loans with government guarantees | 2,122 | 574 | 1,267 | 511 |
Loans held-for-investment | 14,839 | 11,743 | 13,424 | 10,516 |
Total assets | 28,277 | 21,197 | 25,992 | 19,877 |
Deposits | 19,561 | 15,817 | 17,698 | 14,305 |
Other | ||||
Summary of Operations | ||||
Net interest income | (32) | (1) | (60) | 0 |
Provision (benefit) for credit losses | 37 | 3 | 153 | 4 |
Net interest income after provision for credit losses | (69) | (4) | (213) | (4) |
Net gain on loan sales | 0 | 0 | 0 | 1 |
Loan fees and charges | 0 | 1 | 0 | 0 |
Net return on mortgage servicing rights | 0 | 0 | 0 | 0 |
Loan administrative (expense) income | (3) | (19) | (26) | (50) |
Other noninterest income | 5 | 9 | 20 | 58 |
Total noninterest income | 2 | (9) | (6) | 9 |
Compensation and benefits | 41 | 35 | 118 | 100 |
Commissions | 0 | 1 | 0 | 0 |
Loan processing expense | 0 | 1 | 2 | 2 |
Other noninterest expense | (30) | (1) | (137) | 1 |
Total noninterest expense | 11 | 36 | (17) | 103 |
Income (loss) before indirect overhead allocations and income taxes | (78) | (49) | (202) | (98) |
Indirect overhead allocation income (expense) | 33 | 24 | 91 | 73 |
Provision (benefit) for income taxes | 2 | (6) | (13) | (9) |
Net income | (47) | (19) | (98) | (16) |
Average balances | ||||
Loans held-for-sale | 0 | 0 | 0 | 0 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 30 | 29 | 29 | 29 |
Total assets | 4,401 | 3,597 | 4,288 | 3,862 |
Deposits | 967 | 748 | 767 | 522 |
Intersegment Eliminations | ||||
Summary of Operations | ||||
Intersegment (expense) revenue | 24 | (9) | 116 | (24) |
Community Banking | Operating Segments | ||||
Summary of Operations | ||||
Net interest income | 158 | 105 | 395 | 296 |
Provision (benefit) for credit losses | (2) | 0 | 3 | 17 |
Net interest income after provision for credit losses | 160 | 105 | 392 | 279 |
Net gain on loan sales | 2 | (4) | 2 | (10) |
Loan fees and charges | 0 | 0 | 1 | 1 |
Net return on mortgage servicing rights | 0 | 0 | 0 | 0 |
Loan administrative (expense) income | (1) | (1) | (2) | (3) |
Other noninterest income | 15 | 18 | 43 | 46 |
Total noninterest income | 16 | 13 | 44 | 34 |
Compensation and benefits | 28 | 27 | 79 | 77 |
Commissions | 1 | 0 | 2 | 1 |
Loan processing expense | 1 | 1 | 4 | 5 |
Other noninterest expense | 63 | 42 | 231 | 125 |
Total noninterest expense | 93 | 70 | 316 | 208 |
Income (loss) before indirect overhead allocations and income taxes | 83 | 48 | 120 | 105 |
Indirect overhead allocation income (expense) | (11) | (10) | (31) | (30) |
Provision (benefit) for income taxes | 15 | 8 | 19 | 16 |
Net income | 57 | 30 | 70 | 59 |
Average balances | ||||
Loans held-for-sale | 0 | 20 | 0 | 37 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 12,311 | 11,681 | 10,702 | 10,465 |
Total assets | 12,603 | 12,184 | 11,100 | 10,950 |
Deposits | 11,265 | 10,513 | 10,817 | 10,247 |
Community Banking | Intersegment Eliminations | ||||
Summary of Operations | ||||
Intersegment (expense) revenue | (22) | (6) | (97) | (14) |
Mortgage Originations | Operating Segments | ||||
Summary of Operations | ||||
Net interest income | 49 | 37 | 147 | 103 |
Provision (benefit) for credit losses | (3) | (2) | (8) | (3) |
Net interest income after provision for credit losses | 52 | 39 | 155 | 106 |
Net gain on loan sales | 344 | 114 | 737 | 243 |
Loan fees and charges | 29 | 20 | 68 | 47 |
Net return on mortgage servicing rights | 12 | (2) | 10 | 9 |
Loan administrative (expense) income | (10) | (7) | (25) | (16) |
Other noninterest income | 3 | 2 | 5 | 9 |
Total noninterest income | 378 | 127 | 795 | 292 |
Compensation and benefits | 42 | 29 | 111 | 79 |
Commissions | 71 | 37 | 160 | 75 |
Loan processing expense | 15 | 10 | 39 | 23 |
Other noninterest expense | 32 | 25 | 114 | 63 |
Total noninterest expense | 160 | 101 | 424 | 240 |
Income (loss) before indirect overhead allocations and income taxes | 270 | 65 | 526 | 158 |
Indirect overhead allocation income (expense) | (18) | (10) | (45) | (30) |
Provision (benefit) for income taxes | 53 | 11 | 101 | 26 |
Net income | 199 | 44 | 380 | 102 |
Average balances | ||||
Loans held-for-sale | 5,602 | 3,766 | 5,499 | 3,495 |
Loans with government guarantees | 2,122 | 574 | 1,267 | 511 |
Loans held-for-investment | 2,498 | 33 | 2,693 | 22 |
Total assets | 11,195 | 5,378 | 10,539 | 5,018 |
Deposits | 0 | 0 | 0 | 0 |
Mortgage Originations | Intersegment Eliminations | ||||
Summary of Operations | ||||
Intersegment (expense) revenue | (12) | 8 | (46) | 19 |
Mortgage Servicing | Operating Segments | ||||
Summary of Operations | ||||
Net interest income | 5 | 5 | 14 | 11 |
Provision (benefit) for credit losses | 0 | 0 | 0 | 0 |
Net interest income after provision for credit losses | 5 | 5 | 14 | 11 |
Net gain on loan sales | 0 | 0 | 0 | 0 |
Loan fees and charges | 16 | 8 | 43 | 22 |
Net return on mortgage servicing rights | 0 | 0 | 0 | 0 |
Loan administrative (expense) income | 40 | 32 | 112 | 91 |
Other noninterest income | 0 | 0 | 0 | 0 |
Total noninterest income | 56 | 40 | 155 | 113 |
Compensation and benefits | 12 | 7 | 33 | 19 |
Commissions | 0 | 0 | 0 | 0 |
Loan processing expense | 8 | 10 | 24 | 30 |
Other noninterest expense | 21 | 14 | 57 | 43 |
Total noninterest expense | 41 | 31 | 114 | 92 |
Income (loss) before indirect overhead allocations and income taxes | 20 | 14 | 55 | 32 |
Indirect overhead allocation income (expense) | (4) | (4) | (15) | (13) |
Provision (benefit) for income taxes | 3 | 2 | 8 | 4 |
Net income | 13 | 8 | 32 | 15 |
Average balances | ||||
Loans held-for-sale | 0 | 0 | 0 | 0 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 0 | 0 | 0 | 0 |
Total assets | 78 | 38 | 65 | 47 |
Deposits | 7,329 | 4,556 | 6,114 | 3,536 |
Mortgage Servicing | Intersegment Eliminations | ||||
Summary of Operations | ||||
Intersegment (expense) revenue | $ 10 | $ 7 | $ 27 | $ 19 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 28, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | |||||
Interest rate | 6.125% | 6.125% | |||
Repurchase of shares | [1] | $ 0 | $ 50,000,000 | ||
Subsequent event | MP Thrift | |||||
Subsequent Event [Line Items] | |||||
Repurchase of shares (in shares) | 4,587,647 | ||||
Repurchase of shares | $ 150,000,000 | ||||
Share price (in dollars per share) | $ 32.70 | ||||
Subsequent event | Subordinated Debt | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
Interest rate | 4.125% | ||||
[1] | Includes dividend reinvestment shares |