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DERIVATIVES (Tables) | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Schedule of derivative instruments in consolidated balance sheets | The following table presents derivative instruments included in the Consolidated Balance Sheets:
| March 31, 2024 |  | December 31, 2023
(dollars in millions) | Notional Amount | Derivative Assets | Derivative Liabilities |  | Notional Amount | Derivative Assets | Derivative Liabilities
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Interest rate contracts | $82,579 |  | $259 |  | $43 |  |  | $86,895 |  | $173 |  | $44 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |
Interest rate contracts | 193,442 |  | 222 |  | 1,273 |  |  | 185,993 |  | 291 |  | 1,105 |
Foreign exchange contracts | 30,398 |  | 389 |  | 290 |  |  | 32,528 |  | 434 |  | 378 |
Commodities contracts | 1,062 |  | 711 |  | 665 |  |  | 1,251 |  | 685 |  | 640 |
TBA contracts | 2,501 |  | 2 |  | 5 |  |  | 2,337 |  | 3 |  | 16 |
Other contracts | 729 |  | 8 |  | — |  |  | 549 |  | 7 |  | — |
Total derivatives not designated as hedging instruments | 228,132 |  | 1,332 |  | 2,233 |  |  | 222,658 |  | 1,420 |  | 2,139 |
Total gross derivatives | 310,711 |  | 1,591 |  | 2,276 |  |  | 309,553 |  | 1,593 |  | 2,183 |
Less: Gross amounts offset in the Consolidated Balance Sheets(1) |  | (480) |  | (480) |  |  |  | (471) |  | (471) |
Less: Cash collateral applied(1) |  | (642) |  | (91) |  |  |  | (682) |  | (150) |
Total net derivatives presented in the Consolidated Balance Sheets |  | $469 |  | $1,705 |  |  |  | $440 |  | $1,562 |
(1) Amounts represent the impact of enforceable master netting agreements that allow the Company to net settle positive and negative positions, as well as collateral paid and received.
Schedule of fair value hedges | The following table presents the effect of fair value hedges on the Consolidated Statements of Operations and the respective line items affected for each hedged item:
|  | Location and Amount of Gains (Losses) Recognized
|  | Interest Income | Interest Expense
(dollars in millions) |  | Investment Securities | Long-Term Borrowed Funds
Three Months Ended March 31, 2024 |  |  |
Gains (losses) on fair value hedges recognized on: |  |  |
Hedged items |  | ($135) |  | $3 |
Derivatives |  | 139 |  | (3) |
Amounts related to interest settlements on derivatives |  | 25 |  | (4) |
Total income (expense) recognized on fair value hedges |  | $29 |  | ($4) |
Three Months Ended March 31, 2023 |  |  |
Gains (losses) on fair value hedges recognized on: |  |  |
Hedged items |  | $— |  | ($8) |
Derivatives |  | — |  | 8 |
Amounts related to interest settlements on derivatives |  | — |  | (5) |
Total income (expense) recognized on fair value hedges |  | $— |  | ($5) |
The following table reflects amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:
(dollars in millions) | March 31, 2024 |  | December 31, 2023
| Debt securities available for sale(1) | Long-term borrowed funds |  |  | Debt securities available for sale(1) | Long-term borrowed funds
Carrying amount of hedged assets | $9,125 |  | $— |  |  |  | $7,253 |  | $— |
Carrying amount of hedged liabilities | — |  | 480 |  |  |  | — |  | 483 |
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items | (74) |  | (19) |  |  |  | 60 |  | (17) |
(1) Includes the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of March 31, 2024 and December 31, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $6.8 billion and $5.9 billion, respectively, including associated cumulative basis adjustments of $(58) million and $39 million, respectively. The amount of the designated hedging instruments was $4.8 billion and $4.0 billion at March 31, 2024 and December 31, 2023, respectively.
Schedule of effect of cash flow hedges on net income and stockholders' equity | The following table presents the pre-tax net gains (losses) recorded in the Consolidated Statements of Operations and in the Consolidated Statements of Comprehensive Income related to derivative instruments designated as cash flow hedges:
| Three Months Ended March 31, |  |
(dollars in millions) | 2024 |  | 2023 |  |  |  |
Amount of pre-tax net gains (losses) recognized in OCI | ($550) |  |  | $233 |  |  |  |  |
Amount of pre-tax net gains (losses) reclassified from AOCI into interest income | (203) |  |  | (127) |  |  |  |  |
Amount of pre-tax net gains (losses) reclassified from AOCI into interest expense | — |  |  | — |  |  |  |  |
Schedule of effect of derivative Instruments on net income | The following table presents the effect of economic hedges on noninterest income:
| Amounts Recognized in Noninterest Income for the |
| Three Months Ended March 31, |  |  | Affected Line Item in the Consolidated Statements of Operations
(dollars in millions) | 2024 |  | 2023 |  |  |  |
Economic hedge type: |  |  |  |  |  |  |  |
Customer interest rate contracts | ($494) |  |  | $34 |  |  |  |  |  | Foreign exchange and derivative products
Derivatives hedging interest rate risk | 503 |  |  | (19) |  |  |  |  |  | Foreign exchange and derivative products
Customer foreign exchange contracts | (110) |  |  | (4) |  |  |  |  |  | Foreign exchange and derivative products
Derivatives hedging foreign exchange risk | 145 |  |  | (2) |  |  |  |  |  | Foreign exchange and derivative products
Customer commodity contracts | 35 |  |  | (475) |  |  |  |  |  | Foreign exchange and derivative products
Derivatives hedging commodity price risk | (32) |  |  | 486 |  |  |  |  |  | Foreign exchange and derivative products
Residential loan commitments | (2) |  |  | 2 |  |  |  |  |  | Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value | 3 |  |  | (11) |  |  |  |  |  | Mortgage banking fees
Derivative contracts used to hedge residential MSRs | (38) |  |  | 16 |  |  |  |  |  | Mortgage banking fees
Total | $10 |  |  | $27 |  |  |  |  |  |

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