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Fair Value of Assets and Liabilities (Tables) | 12 Months Ended
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Dec. 31, 2021
Fair Value Disclosures [Abstract] |
Schedule of Assets and Liabilities Measured on Recurring Basis | The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020: Tables 8.24.1a-b BALANCES OF ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
|  | December 31, 2021
(Dollars in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Trading securities: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | — |  |  | $ | 85 |  |  | $ | — |  |  | $ | 85 |
Government agency issued MBS |  | — |  |  | 464 |  |  | — |  |  | 464 |
Government agency issued CMO |  | — |  |  | 62 |  |  | — |  |  | 62 |
Other U.S. government agencies |  | — |  |  | 276 |  |  | — |  |  | 276 |
States and municipalities |  | — |  |  | 34 |  |  | — |  |  | 34 |
Corporate and other debt |  | — |  |  | 642 |  |  | — |  |  | 642 |
Interest-only strips (elected fair value) |  | — |  |  | — |  |  | 38 |  |  | 38 |
Total trading securities |  | — |  |  | 1,563 |  |  | 38 |  |  | 1,601 |
Loans held for sale (elected fair value) |  | — |  |  | 230 |  |  | 28 |  |  | 258 |
Securities available for sale: |  |  |  |  |  |  |  |
Government agency issued MBS |  | — |  |  | 5,055 |  |  | — |  |  | 5,055 |
Government agency issued CMO |  | — |  |  | 2,257 |  |  | — |  |  | 2,257 |
Other U.S. government agencies |  | — |  |  | 850 |  |  | — |  |  | 850 |
States and municipalities |  | — |  |  | 545 |  |  | — |  |  | 545 |
Total securities available for sale |  | — |  |  | 8,707 |  |  | — |  |  | 8,707 |
Other assets: |  |  |  |  |  |  |  |
Deferred compensation mutual funds |  | 125 |  |  | — |  |  | — |  |  | 125 |
Equity, mutual funds, and other |  | 25 |  |  | — |  |  | — |  |  | 25 |
Derivatives, forwards and futures |  | 12 |  |  | — |  |  | — |  |  | 12 |
Derivatives, interest rate contracts |  | — |  |  | 311 |  |  | — |  |  | 311 |
Derivatives, other |  | — |  |  | 1 |  |  | — |  |  | 1 |
Total other assets |  | 162 |  |  | 312 |  |  | — |  |  | 474 |
Total assets |  | $ | 162 |  |  | $ | 10,812 |  |  | $ | 66 |  |  | $ | 11,040 |
Trading liabilities: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | — |  |  | $ | 334 |  |  | $ | — |  |  | $ | 334 |
Government issued agency MBS |  | — |  |  | 1 |  |  | — |  |  | 1 |
Corporate and other debt |  | — |  |  | 91 |  |  | — |  |  | 91 |
Total trading liabilities |  | — |  |  | 426 |  |  | — |  |  | 426 |
Other liabilities: |  |  |  |  |  |  |  |
Derivatives, forwards and futures |  | 11 |  |  | — |  |  | — |  |  | 11 |
Derivatives, interest rate contracts |  | — |  |  | 93 |  |  | — |  |  | 93 |
Derivatives, other |  | — |  |  | 1 |  |  | 23 |  |  | 24 |
Total other liabilities |  | 11 |  |  | 94 |  |  | 23 |  |  | 128 |
Total liabilities |  | $ | 11 |  |  | $ | 520 |  |  | $ | 23 |  |  | $ | 554 |
|  | December 31, 2020
(Dollars in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Trading securities: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | — |  |  | $ | 81 |  |  | $ | — |  |  | $ | 81 |
Government agency issued MBS |  | — |  |  | 633 |  |  | — |  |  | 633 |
Government agency issued CMO |  | — |  |  | 212 |  |  | — |  |  | 212 |
Other U.S. government agencies |  | — |  |  | 62 |  |  | — |  |  | 62 |
States and municipalities |  | — |  |  | 7 |  |  | — |  |  | 7 |
Corporate and other debt |  | — |  |  | 181 |  |  | — |  |  | 181 |
Total trading securities |  | — |  |  | 1,176 |  |  | — |  |  | 1,176 |
Loans held for sale (elected fair value) |  | — |  |  | 393 |  |  | 12 |  |  | 405 |
Loans held for investment (elected fair value) |  | — |  |  | — |  |  | 16 |  |  | 16 |
Securities available for sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | — |  |  | 613 |  |  | — |  |  | 613 |
Government agency issued MBS |  | — |  |  | 3,812 |  |  | — |  |  | 3,812 |
Government agency issued CMO |  | — |  |  | 2,406 |  |  | — |  |  | 2,406 |
Other U.S. government agencies |  | — |  |  | 684 |  |  | — |  |  | 684 |
States and municipalities |  | — |  |  | 460 |  |  | — |  |  | 460 |
Corporate and other debt |  | — |  |  | 40 |  |  | — |  |  | 40 |
Interest-only strips (elected fair value) |  | — |  |  | — |  |  | 32 |  |  | 32 |
Total securities available for sale |  | — |  |  | 8,015 |  |  | 32 |  |  | 8,047 |
Other assets: |  |  |  |  |  |  |  |
Deferred compensation mutual funds |  | 118 |  |  | — |  |  | — |  |  | 118 |
Equity, mutual funds, and other |  | 25 |  |  | — |  |  | — |  |  | 25 |
Derivatives, forwards and futures |  | 63 |  |  | — |  |  | — |  |  | 63 |
Derivatives, interest rate contracts |  | — |  |  | 702 |  |  | — |  |  | 702 |
Derivatives, other |  | — |  |  | 4 |  |  | — |  |  | 4 |
Total other assets |  | 206 |  |  | 706 |  |  | — |  |  | 912 |
Total assets |  | $ | 206 |  |  | $ | 10,290 |  |  | $ | 60 |  |  | $ | 10,556 |
Trading liabilities: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | — |  |  | $ | 307 |  |  | $ | — |  |  | $ | 307 |
Government agency issued MBS |  | — |  |  | 3 |  |  | — |  |  | 3 |
Corporate and other debt |  | — |  |  | 43 |  |  | — |  |  | 43 |
Total trading liabilities |  | — |  |  | 353 |  |  | — |  |  | 353 |
Other liabilities: |  |  |  |  |  |  |  |
Derivatives, forwards and futures |  | 71 |  |  | — |  |  | — |  |  | 71 |
Derivatives, interest rate contracts |  | — |  |  | 60 |  |  | — |  |  | 60 |
Derivatives, other |  | — |  |  | 4 |  |  | 14 |  |  | 18 |
Total other liabilities |  | 71 |  |  | 64 |  |  | 14 |  |  | 149 |
Total liabilities |  | $ | 71 |  |  | $ | 417 |  |  | $ | 14 |  |  | $ | 502 |
Summary of Changes in Level 3 Assets and Liabilities Measured At Fair Value | Changes in Recurring Level 3 Fair Value Measurements The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2021, 2020 and 2019 on a recurring basis are summarized as follows: Tables 8.24.2a-b-c CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
|  |  |  | Year Ended December 31, 2021 |
(Dollars in millions) |  |  |  | Interest-only strips |  | Loans held for sale |  | Loans held for investment |  | Net derivative liabilities |
Balance on January 1, 2021 |  |  |  | $ | 32 |  |  | $ | 12 |  |  | $ | 16 |  |  | $ | (14) |  |
Total net gains (losses) included in net income |  |  |  | 3 |  |  | 1 |  |  | — |  |  | (19) |  |
Purchases |  |  |  | — |  |  | 10 |  |  | — |  |  | — |  |
Sales |  |  |  | (68) |  |  | (18) |  |  | — |  |  | — |  |
Settlements |  |  |  | — |  |  | (3) |  |  | (2) |  |  | 10 |  |
Net transfers into (out of) Level 3 |  |  |  | 71 |  | (b) | 26 |  | (e) | (14) |  | (e) | — |  |
Balance on December 31, 2021 |  |  |  | $ | 38 |  |  | $ | 28 |  |  | $ | — |  |  | $ | (23) |  |
Net unrealized gains (losses) included in net income |  |  |  | $ | (2) |  | (c) | $ | 1 |  | (a) | $ | — |  |  | $ | (19) |  | (d)
|  | Year Ended December 31, 2020 |
(Dollars in millions) |  | Trading securities |  | Interest-only strips- AFS |  | Loans held for sale |  | Loans held for investment |  | Net derivative liabilities |
Balance on January 1, 2020 |  | $ | 1 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | — |  |  | $ | (23) |  |
Acquired |  | — |  |  | — |  |  | — |  |  | 14 |  |  | — |  |
Total net gains (losses) included in net income |  | (1) |  |  | (6) |  |  | 1 |  |  | — |  |  | (1) |  |
Purchases |  | — |  |  | 6 |  |  | — |  |  | — |  |  | — |  |
Sales |  | — |  |  | (11) |  |  | — |  |  | (4) |  |  | — |  |
Settlements |  | — |  |  | — |  |  | (3) |  |  | (3) |  |  | 10 |  |
Net transfers into (out of) Level 3 |  | — |  |  | 24 |  | (b) | — |  |  | 9 |  |  | — |  |
Balance on December 31, 2020 |  | $ | — |  |  | $ | 32 |  |  | $ | 12 |  |  | $ | 16 |  |  | $ | (14) |  |
Net unrealized gains (losses) included in net income |  | $ | — |  | (a) | $ | (4) |  | (c) | $ | 1 |  | (a) | $ | — |  |  | $ | (1) |  | (d)
|  | Year Ended December 31, 2019 |
(Dollars in millions) |  | Trading securities |  | Interest-only strips- AFS |  | Loans held for sale |  | Net derivative liabilities |
Balance on January 1, 2019 |  | $ | 2 |  |  | $ | 10 |  |  | $ | 16 |  |  | $ | (32) |  |
Total net gains (losses) included in net income |  | — |  |  | (5) |  |  | 2 |  |  | (4) |  |
Purchases |  | — |  |  | — |  |  | — |  |  | — |  |
Sales |  | — |  |  | (47) |  |  | — |  |  | — |  |
Settlements |  | (1) |  |  | — |  |  | (4) |  |  | 13 |  |
Net transfers into (out of) Level 3 |  | — |  |  | 61 |  | (b) | — |  |  | — |  |
Balance on December 31, 2019 |  | $ | 1 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | (23) |  |
Net unrealized gains (losses) included in net income |  | $ | — |  | (a) | $ | (2) |  | (c) | $ | 2 |  | (a) | $ | (4) |  | (d)
(a)Primarily included in mortgage banking and title income on the Consolidated Statements of Income. (b)Transfers into interest-only strips level 3 measured on a recurring basis reflect movements from loans held for sale (Level 2 nonrecurring). (c)Primarily included in fixed income on the Consolidated Statements of Income. (d)Included in other expense. (e)The loans held for investment at fair value option portfolio was transferred to the loans held for sale portfolio on April 1, 2021.
Summary of Changes in Level 3 Net Derivative Asset (Liability) Measured at Fair Value | Changes in Recurring Level 3 Fair Value Measurements The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2021, 2020 and 2019 on a recurring basis are summarized as follows: Tables 8.24.2a-b-c CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
|  |  |  | Year Ended December 31, 2021 |
(Dollars in millions) |  |  |  | Interest-only strips |  | Loans held for sale |  | Loans held for investment |  | Net derivative liabilities |
Balance on January 1, 2021 |  |  |  | $ | 32 |  |  | $ | 12 |  |  | $ | 16 |  |  | $ | (14) |  |
Total net gains (losses) included in net income |  |  |  | 3 |  |  | 1 |  |  | — |  |  | (19) |  |
Purchases |  |  |  | — |  |  | 10 |  |  | — |  |  | — |  |
Sales |  |  |  | (68) |  |  | (18) |  |  | — |  |  | — |  |
Settlements |  |  |  | — |  |  | (3) |  |  | (2) |  |  | 10 |  |
Net transfers into (out of) Level 3 |  |  |  | 71 |  | (b) | 26 |  | (e) | (14) |  | (e) | — |  |
Balance on December 31, 2021 |  |  |  | $ | 38 |  |  | $ | 28 |  |  | $ | — |  |  | $ | (23) |  |
Net unrealized gains (losses) included in net income |  |  |  | $ | (2) |  | (c) | $ | 1 |  | (a) | $ | — |  |  | $ | (19) |  | (d)
|  | Year Ended December 31, 2020 |
(Dollars in millions) |  | Trading securities |  | Interest-only strips- AFS |  | Loans held for sale |  | Loans held for investment |  | Net derivative liabilities |
Balance on January 1, 2020 |  | $ | 1 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | — |  |  | $ | (23) |  |
Acquired |  | — |  |  | — |  |  | — |  |  | 14 |  |  | — |  |
Total net gains (losses) included in net income |  | (1) |  |  | (6) |  |  | 1 |  |  | — |  |  | (1) |  |
Purchases |  | — |  |  | 6 |  |  | — |  |  | — |  |  | — |  |
Sales |  | — |  |  | (11) |  |  | — |  |  | (4) |  |  | — |  |
Settlements |  | — |  |  | — |  |  | (3) |  |  | (3) |  |  | 10 |  |
Net transfers into (out of) Level 3 |  | — |  |  | 24 |  | (b) | — |  |  | 9 |  |  | — |  |
Balance on December 31, 2020 |  | $ | — |  |  | $ | 32 |  |  | $ | 12 |  |  | $ | 16 |  |  | $ | (14) |  |
Net unrealized gains (losses) included in net income |  | $ | — |  | (a) | $ | (4) |  | (c) | $ | 1 |  | (a) | $ | — |  |  | $ | (1) |  | (d)
|  | Year Ended December 31, 2019 |
(Dollars in millions) |  | Trading securities |  | Interest-only strips- AFS |  | Loans held for sale |  | Net derivative liabilities |
Balance on January 1, 2019 |  | $ | 2 |  |  | $ | 10 |  |  | $ | 16 |  |  | $ | (32) |  |
Total net gains (losses) included in net income |  | — |  |  | (5) |  |  | 2 |  |  | (4) |  |
Purchases |  | — |  |  | — |  |  | — |  |  | — |  |
Sales |  | — |  |  | (47) |  |  | — |  |  | — |  |
Settlements |  | (1) |  |  | — |  |  | (4) |  |  | 13 |  |
Net transfers into (out of) Level 3 |  | — |  |  | 61 |  | (b) | — |  |  | — |  |
Balance on December 31, 2019 |  | $ | 1 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | (23) |  |
Net unrealized gains (losses) included in net income |  | $ | — |  | (a) | $ | (2) |  | (c) | $ | 2 |  | (a) | $ | (4) |  | (d)
(a)Primarily included in mortgage banking and title income on the Consolidated Statements of Income. (b)Transfers into interest-only strips level 3 measured on a recurring basis reflect movements from loans held for sale (Level 2 nonrecurring). (c)Primarily included in fixed income on the Consolidated Statements of Income. (d)Included in other expense. (e)The loans held for investment at fair value option portfolio was transferred to the loans held for sale portfolio on April 1, 2021.
Nonrecurring Fair Value Measurements | For assets measured at fair value on a nonrecurring basis which were still held on the Consolidated Balance Sheets at December 31, 2021, 2020 and 2019, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value. Tables 8.24.3a-b-c LEVEL OF VALUATION ASSUMPTIONS FOR ASSETS MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS
|  | Carrying value at December 31, 2021 |  | Year Ended December 31, 2021
(Dollars in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Net gains (losses)
Loans held for sale—SBAs and USDA |  | $ | — |  |  | $ | 852 |  |  | $ | 1 |  |  | $ | 853 |  |  | $ | (2) |
Loans held for sale—first mortgages |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |
Loans and leases (a) |  | — |  |  | — |  |  | 84 |  |  | 84 |  |  | (13) |
OREO (b) |  | — |  |  | — |  |  | 3 |  |  | 3 |  |  | (1) |
Other assets (c) |  | — |  |  | — |  |  | 30 |  |  | 30 |  |  | (2) |
|  |  |  |  |  |  |  |  |  | $ | (18) |
|  | Carrying value at December 31, 2020 |  | Year Ended December 31, 2020
(Dollars in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Net gains (losses)
Loans held for sale—SBAs and USDA |  | $ | — |  |  | $ | 508 |  |  | $ | 1 |  |  | $ | 509 |  |  | $ | (3) |
Loans held for sale—first mortgages |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |
Loans and leases (a) |  | — |  |  | — |  |  | 77 |  |  | 77 |  |  | (12) |
OREO (b) |  | — |  |  | — |  |  | 15 |  |  | 15 |  |  | (1) |
Other assets (c) |  | — |  |  | — |  |  | 9 |  |  | 9 |  |  | (2) |
|  |  |  |  |  |  |  |  |  | $ | (18) |
|  | Carrying value at December 31, 2019 |  | Year Ended December 31, 2019
(Dollars in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Net gains (losses)
Loans held for sale—SBAs and USDA |  | $ | — |  |  | $ | 493 |  |  | $ | 1 |  |  | $ | 494 |  |  | $ | (2) |
Loans held for sale—first mortgages |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |
Loans and leases (a) |  | — |  |  | — |  |  | 42 |  |  | 42 |  |  | (7) |
OREO (b) |  | — |  |  | — |  |  | 16 |  |  | 16 |  |  | (1) |
Other assets (c) |  | — |  |  | — |  |  | 11 |  |  | 11 |  |  | (2) |
|  |  |  |  |  |  |  |  |  | $ | (12) |
(a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses. (b)Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages. (c)Represents tax credit investments accounted for under the equity method.
Schedule of Unobservable Inputs Utilized In Determining The Fair Value of Level 3 Recurring And Non-Recurring Measurements | The following tables provide information regarding the unobservable inputs utilized in determining the fair value of Level 3 recurring and non-recurring measurements as of December 31, 2021 and 2020: Tables 8.24.4a-b UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUE MEASUREMENTS
(Dollars in millions) |  |  |  |  |  |  |  | Values Utilized
Level 3 Class |  | Fair Value at December 31, 2021 |  | Valuation Techniques |  | Unobservable Input |  | Range |  | Weighted Average (d)
Trading securities - SBA interest-only strips |  | $ | 38 |  |  | Discounted cash flow |  | Constant prepayment rate |  | 11%-12% |  | 11%
|  |  |  |  |  | Bond equivalent yield |  | 11% - 14% |  | 11%
Loans held for sale - residential real estate |  | $ | 29 |  |  | Discounted cash flow |  | Prepayment speeds - First mortgage |  | 4% - 12% |  | 5%
|  |  |  |  |  | Foreclosure losses |  | 54% - 66% |  | 65%
|  |  |  |  |  | Loss severity trends - First mortgage |  | 1% - 14% of UPB |  | 8%
Loans held for sale - unguaranteed interest in SBA loans |  | $ | 1 |  |  | Discounted cash flow |  | Constant prepayment rate |  | 8% - 12% |  | 10%
|  |  |  |  |  | Bond equivalent yield |  | 11% |  | 11%
Derivative liabilities, other |  | $ | 23 |  |  | Discounted cash flow |  | Visa covered litigation resolution amount |  | $5.8 billion - $6.2 billion |  | $6.0 billion
|  |  |  |  |  | Probability of resolution scenarios |  | 15% - 35% |  | 24%
|  |  |  |  |  | Time until resolution |  | 12 - 36 months |  | 25 months
Loans and leases (a) |  | $ | 84 |  |  | Appraisals from comparable properties |  | Marketability adjustments for specific properties |  | 0% - 10% of appraisal |  | NM
|  |  |  | Other collateral valuations |  | Borrowing base certificates adjustment |  | 20% - 50% of gross value |  | NM
|  |  |  |  |  | Financial Statements/Auction values adjustment |  | 0% - 25% of reported value |  | NM
OREO (b) |  | $ | 3 |  |  | Appraisals from comparable properties |  | Adjustment for value changes since appraisal |  | 0% - 10% of appraisal |  | NM
Other assets (c) |  | $ | 30 |  |  | Discounted cash flow |  | Adjustments to current sales yields for specific properties |  | 0% - 15% adjustment to yield |  | NM
|  |  |  | Appraisals from comparable properties |  | Marketability adjustments for specific properties |  | 0% - 25% of appraisal |  | NM
NM - Not meaningful (a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses. (b)Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages. (c)Represents tax credit investments accounted for under the equity method. (d)Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.
(Dollars in millions) |  |  |  |  |  |  |  | Values Utilized
Level 3 Class |  | Fair Value at December 31, 2020 |  | Valuation Techniques |  | Unobservable Input |  | Range |  | Weighted Average (d)
Securities - SBA interest-only strips |  | $ | 32 |  |  | Discounted cash flow |  | Constant prepayment rate |  | 12% |  | 12%
|  |  |  |  |  | Bond equivalent yield |  | 15% - 17% |  | 15%
Loans held for sale - residential real estate |  | $ | 13 |  |  | Discounted cash flow |  | Prepayment speeds - First mortgage |  | 5% - 15% |  | 5%
|  |  |  |  |  | Foreclosure losses |  | 59% - 70% |  | 63%
|  |  |  |  |  | Loss severity trends - First mortgage |  | 3% - 19% of UPB |  | 12%
Loans held for sale - unguaranteed interest in SBA loans |  | $ | 1 |  |  | Discounted cash flow |  | Constant prepayment rate |  | 8% - 12% |  | 10%
|  |  |  |  |  | Bond equivalent yield |  | 7%-8% |  | 7%
Loans held for investment |  | $ | 16 |  |  | Discounted cash flow |  | Constant prepayment rate |  | 0% - 26% |  | 11%
|  |  |  |  |  | Constant default rate |  | 0%-14% |  | 1%
|  |  |  |  |  | Loss severity trends |  | 0% - 100% |  | 11%
Derivative liabilities, other |  | $ | 14 |  |  | Discounted cash flow |  | Visa covered litigation resolution amount |  | $5.4 billion - $6.0 billion |  | $5.8 billion
|  |  |  |  |  | Probability of resolution scenarios |  | 10% - 50% |  | 16%
|  |  |  |  |  | Time until resolution |  | 3 - 27 months |  | 19 months
Loans and leases (a) |  | $ | 77 |  |  | Appraisals from comparable properties |  | Marketability adjustments for specific properties |  | 0% - 10% of appraisal |  | NM
|  |  |  | Other collateral valuations |  | Borrowing base certificates adjustment |  | 20% - 50% of gross value |  | NM
|  |  |  |  |  | Financial Statements/Auction values adjustment |  | 0% - 25% of reported value |  | NM
OREO (b) |  | $ | 15 |  |  | Appraisals from comparable properties |  | Adjustment for value changes since appraisal |  | 0% - 10% of appraisal |  | NM
Other assets (c) |  | $ | 9 |  |  | Discounted cash flow |  | Adjustments to current sales yields for specific properties |  | 0% - 15% adjustment to yield |  | NM
|  |  |  | Appraisals from comparable properties |  | Marketability adjustments for specific properties |  | 0% - 25% of appraisal |  | NM
NM - Not meaningful (a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses. (b)Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages. (c)Represents tax credit investments accounted for under the equity method. (d)Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.
Summary of Differences Between The Fair Value Carrying Amount of Mortgages Held-For-Sale and Aggregate Unpaid Principal Amount | The following tables reflect the differences between the fair value carrying amount of residential real estate loans held for sale and held for investment measured at fair value in accordance with management’s election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity. Tables 8.24.5a-b DIFFERENCES BETWEEN FAIR VALUE CARRYING AMOUNTS AND CONTRACTUAL AMOUNTS OF RESIDENTIAL REAL ESTATE LOANS
|  | December 31, 2021
(Dollars in millions) |  | Fair value carrying amount |  | Aggregate unpaid principal |  | Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value: |  |  |  |  |  |
Total loans |  | $ | 258 |  |  | $ | 264 |  |  | $ | (6) |
Nonaccrual loans |  | 4 |  |  | 7 |  |  | (3) |
|  | December 31, 2020
(Dollars in millions) |  | Fair value carrying amount |  | Aggregate unpaid principal |  | Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value: |  |  |  |  |  |
Total loans |  | $ | 405 |  |  | $ | 442 |  |  | $ | (37) |
Nonaccrual loans |  | 2 |  |  | 5 |  |  | (3) |
Loans held for investment reported at fair value: |  |  |  |  |  |
Total loans |  | 16 |  |  | 17 |  |  | (1) |
Nonaccrual loans |  | 1 |  |  | 1 |  |  | — |
Changes In Fair Value of Assets and Liabilities Which Fair Value Option Included In Current Period Earnings | Assets and liabilities accounted for under the fair value election are initially measured at fair value with subsequent changes in fair value recognized in earnings. Such changes in the fair value of assets and liabilities for which FHN elected the fair value option are included in current period earnings with classification in the income statement line item reflected in the following table: Table 8.24.6 CHANGES IN FAIR VALUE RECOGNIZED IN NET INCOME
| Year Ended December 31,
(Dollars in millions) | 2021 |  | 2020 |  | 2019
Changes in fair value included in net income: |  |  |  |  |
Mortgage banking and title noninterest income |  |  |  |  |
Loans held for sale | $ | (10) |  |  | $ | 4 |  |  | $ | 2 |
Summary of Book Value And Estimated Fair Value of Financial Instruments | The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020: Tables 8.24.7a-b BOOK VALUE AND ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
|  | December 31, 2021
|  | Book Value |  | Fair Value
(Dollars in millions) |  |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |
Loans and leases, net of allowance for loan and lease losses |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial, financial and industrial |  | $ | 30,734 |  |  | $ | — |  |  | $ | — |  |  | $ | 31,020 |  |  | $ | 31,020 |
Commercial real estate |  | 11,955 |  |  | — |  |  | — |  |  | 11,986 |  |  | 11,986 |
Consumer: |  |  |  |  |  |  |  |  |  |
Consumer real estate |  | 10,609 |  |  | — |  |  | — |  |  | 11,111 |  |  | 11,111 |
Credit card and other |  | 891 |  |  | — |  |  | — |  |  | 906 |  |  | 906 |
Total loans and leases, net of allowance for loan and lease losses |  | 54,189 |  |  | — |  |  | — |  |  | 55,023 |  |  | 55,023 |
Short-term financial assets: |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits with banks |  | 14,907 |  |  | 14,907 |  |  | — |  |  | — |  |  | 14,907 |
Federal funds sold |  | 153 |  |  | — |  |  | 153 |  |  | — |  |  | 153 |
Securities purchased under agreements to resell |  | 488 |  |  | — |  |  | 488 |  |  | — |  |  | 488 |
Total short-term financial assets |  | 15,548 |  |  | 14,907 |  |  | 641 |  |  | — |  |  | 15,548 |
Trading securities (a) |  | 1,601 |  |  | — |  |  | 1,563 |  |  | 38 |  |  | 1,601 |
Loans held for sale: |  |  |  |  |  |  |  |  |  |
Mortgage loans (elected fair value) (a) |  | 258 |  |  | — |  |  | 230 |  |  | 28 |  |  | 258 |
USDA & SBA loans - LOCOM |  | 853 |  |  | — |  |  | 855 |  |  | 1 |  |  | 856 |
Other loans - LOCOM |  | 24 |  |  | — |  |  | 24 |  |  | — |  |  | 24 |
Mortgage loans - LOCOM |  | 37 |  |  | — |  |  | — |  |  | 37 |  |  | 37 |
Total loans held for sale |  | 1,172 |  |  | — |  |  | 1,109 |  |  | 66 |  |  | 1,175 |
Securities available for sale (a) |  | 8,707 |  |  | — |  |  | 8,707 |  |  | — |  |  | 8,707 |
Securities held to maturity |  | 712 |  |  | — |  |  | 705 |  |  | — |  |  | 705 |
Derivative assets (a) |  | 324 |  |  | 12 |  |  | 312 |  |  | — |  |  | 324 |
Other assets: |  |  |  |  |  |  |  |  |  |
Tax credit investments |  | 456 |  |  | — |  |  | — |  |  | 450 |  |  | 450 |
Deferred compensation mutual funds |  | 125 |  |  | 125 |  |  | — |  |  | — |  |  | 125 |
Equity, mutual funds, and other (b) |  | 257 |  |  | 25 |  |  | — |  |  | 232 |  |  | 257 |
Total other assets |  | 838 |  |  | 150 |  |  | — |  |  | 682 |  |  | 832 |
Total assets |  | $ | 83,091 |  |  | $ | 15,069 |  |  | $ | 13,037 |  |  | $ | 55,809 |  |  | $ | 83,915 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Defined maturity deposits |  | $ | 3,500 |  |  | $ | — |  |  | $ | 3,524 |  |  | $ | — |  |  | $ | 3,524 |
Trading liabilities (a) |  | 426 |  |  | — |  |  | 426 |  |  | — |  |  | 426 |
Short-term financial liabilities: |  |  |  |  |  |  |  |  |  |
Federal funds purchased |  | 775 |  |  | — |  |  | 775 |  |  | — |  |  | 775 |
Securities sold under agreements to repurchase |  | 1,247 |  |  | — |  |  | 1,247 |  |  | — |  |  | 1,247 |
Other short-term borrowings |  | 102 |  |  | — |  |  | 102 |  |  | — |  |  | 102 |
Total short-term financial liabilities |  | 2,124 |  |  | — |  |  | 2,124 |  |  | — |  |  | 2,124 |
Term borrowings: |  |  |  |  |  |  |  |  |  |
Real estate investment trust-preferred |  | 46 |  |  | — |  |  | — |  |  | 47 |  |  | 47 |
Term borrowings—new market tax credit investment |  | 59 |  |  | — |  |  | — |  |  | 58 |  |  | 58 |
Secured borrowings |  | 6 |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Junior subordinated debentures |  | 148 |  |  | — |  |  | — |  |  | 150 |  |  | 150 |
Other long term borrowings |  | 1,331 |  |  | — |  |  | 1,452 |  |  | — |  |  | 1,452 |
Total term borrowings |  | 1,590 |  |  | — |  |  | 1,452 |  |  | 261 |  |  | 1,713 |
Derivative liabilities (a) |  | 128 |  |  | 11 |  |  | 94 |  |  | 23 |  |  | 128 |
Total liabilities |  | $ | 7,768 |  |  | $ | 11 |  |  | $ | 7,620 |  |  | $ | 284 |  |  | $ | 7,915 |
(a)Classes are detailed in the recurring and nonrecurring measurement tables. (b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $29 million and FRB stock of $203 million.
|  | December 31, 2020
|  | Book Value |  | Fair Value
(Dollars in millions) |  |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |
Loans and leases, net of allowance for loan and lease losses |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial, financial and industrial |  | $ | 32,651 |  |  | $ | — |  |  | $ | — |  |  | $ | 32,582 |  |  | $ | 32,582 |
Commercial real estate |  | 12,033 |  |  | — |  |  | — |  |  | 12,079 |  |  | 12,079 |
Consumer: |  |  |  |  |  |  |  |  |  |
Consumer real estate |  | 11,483 |  |  | — |  |  | — |  |  | 11,903 |  |  | 11,903 |
Credit card and other |  | 1,102 |  |  | — |  |  | — |  |  | 1,131 |  |  | 1,131 |
Total loans and leases, net of allowance for loan and lease losses |  | 57,269 |  |  | — |  |  | — |  |  | 57,695 |  |  | 57,695 |
Short-term financial assets: |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits with banks |  | 8,351 |  |  | 8,351 |  |  | — |  |  | — |  |  | 8,351 |
Federal funds sold |  | 65 |  |  | — |  |  | 65 |  |  | — |  |  | 65 |
Securities purchased under agreements to resell |  | 380 |  |  | — |  |  | 380 |  |  | — |  |  | 380 |
Total short-term financial assets |  | 8,796 |  |  | 8,351 |  |  | 445 |  |  | — |  |  | 8,796 |
Trading securities (a) |  | 1,176 |  |  | — |  |  | 1,176 |  |  | — |  |  | 1,176 |
Loans held for sale: |  |  |  |  |  |  |  |  |  |
Mortgage loans (elected fair value) (a) |  | 405 |  |  | — |  |  | 393 |  |  | 12 |  |  | 405 |
USDA & SBA loans - LOCOM |  | 509 |  |  | — |  |  | 511 |  |  | 1 |  |  | 512 |
Other loans - LOCOM |  | 31 |  |  | — |  |  | 31 |  |  | — |  |  | 31 |
Mortgage loans - LOCOM |  | 77 |  |  | — |  |  | — |  |  | 77 |  |  | 77 |
Total loans held for sale |  | 1,022 |  |  | — |  |  | 935 |  |  | 90 |  |  | 1,025 |
Securities available for sale (a) |  | 8,047 |  |  | — |  |  | 8,015 |  |  | 32 |  |  | 8,047 |
Securities held to maturity |  | 10 |  |  | — |  |  | — |  |  | 10 |  |  | 10 |
Derivative assets (a) |  | 769 |  |  | 63 |  |  | 706 |  |  | — |  |  | 769 |
Other assets: |  |  |  |  |  |  |  |  |  |
Tax credit investments |  | 400 |  |  | — |  |  | — |  |  | 371 |  |  | 371 |
Deferred compensation mutual funds |  | 118 |  |  | 118 |  |  | — |  |  | — |  |  | 118 |
Equity, mutual funds, and other (b) |  | 288 |  |  | 25 |  |  | — |  |  | 263 |  |  | 288 |
Total other assets |  | 806 |  |  | 143 |  |  | — |  |  | 634 |  |  | 777 |
Total assets |  | $ | 77,895 |  |  | $ | 8,557 |  |  | $ | 11,277 |  |  | $ | 58,461 |  |  | $ | 78,295 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Defined maturity deposits |  | $ | 5,070 |  |  | $ | — |  |  | $ | 5,083 |  |  | $ | — |  |  | $ | 5,083 |
Trading liabilities (a) |  | 353 |  |  | — |  |  | 353 |  |  | — |  |  | 353 |
Short-term financial liabilities: |  |  |  |  |  |  |  |  |  |
Federal funds purchased |  | 845 |  |  | — |  |  | 845 |  |  | — |  |  | 845 |
Securities sold under agreements to repurchase |  | 1,187 |  |  | — |  |  | 1,187 |  |  | — |  |  | 1,187 |
Other short-term borrowings |  | 166 |  |  | — |  |  | 166 |  |  | — |  |  | 166 |
Total short-term financial liabilities |  | 2,198 |  |  | — |  |  | 2,198 |  |  | — |  |  | 2,198 |
Term borrowings: |  |  |  |  |  |  |  |  |  |
Real estate investment trust-preferred |  | 46 |  |  | — |  |  | — |  |  | 47 |  |  | 47 |
Term borrowings—new market tax credit investment |  | 45 |  |  | — |  |  | — |  |  | 45 |  |  | 45 |
Secured borrowings |  | 15 |  |  | — |  |  | — |  |  | 15 |  |  | 15 |
Junior subordinated debentures |  | 238 |  |  | — |  |  | — |  |  | 223 |  |  | 223 |
Other long term borrowings |  | 1,326 |  |  | — |  |  | 1,455 |  |  | — |  |  | 1,455 |
Total term borrowings |  | 1,670 |  |  | — |  |  | 1,455 |  |  | 330 |  |  | 1,785 |
Derivative liabilities (a) |  | 149 |  |  | 71 |  |  | 64 |  |  | 14 |  |  | 149 |
Total liabilities |  | $ | 9,440 |  |  | $ | 71 |  |  | $ | 9,153 |  |  | $ | 344 |  |  | $ | 9,568 |
(a)Classes are detailed in the recurring and nonrecurring measurement tables. (b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $61 million and FRB stock of $202 million. The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of December 31, 2021 and December 31, 2020: Table 8.24.8 UNFUNDED COMMITMENTS
|  | Contractual Amount |  | Fair Value
(Dollars in millions) |  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2021 |  | December 31, 2020
Unfunded Commitments: |  |  |  |  |  |  |  |
Loan commitments |  | $ | 24,229 |  |  | $ | 20,796 |  |  | $ | 1 |  |  | $ | 2 |
Standby and other commitments |  | 810 |  |  | 751 |  |  | 6 |  |  | 6 |

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