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Notes to Consolidated Financial Statements, continued
143
The following tables present the change in fair value during the
years ended December 31, 2014 and 2013 of financial
instruments for which the FVO has been elected, as well as
MSRs. The tables do not reflect the change in fair value
attributable to the related economic hedges the Company uses
to mitigate the market-related risks associated with the financial
instruments. Generally, the changes in the fair value of economic
hedges are also recognized in trading income, mortgage
production related income, or mortgage servicing related
income, as appropriate, and are designed to partially offset the
change in fair value of the financial instruments referenced in
the tables below. The Company’s economic hedging activities
are deployed at both the instrument and portfolio level.
Fair Value Gain/(Loss) for the Year Ended
December 31, 2014 for Items Measured at Fair Value
Pursuant to Election of the FVO
(Dollars in millions) Trading
Income
Mortgage
Production
Related
Income 1
Mortgage
Servicing
Related
Income
Total Changes
in Fair Values
Included in
Current
Period
Earnings 2
Assets:
Trading loans $11 $— $— $11
LHFS — 3 — 3
LHFI — 11 — 11
MSRs — 3 (401) (398)
Liabilities:
Brokered time deposits 6 — — 6
Long-term debt 17 — — 17
1 Income related to LHFS does not include income from IRLCs. For the year ended December 31, 2014, income related to MSRs includes mortgage servicing income recognized upon the
sale of loans reported at LOCOM.
2 Changes in fair value for the year ended December 31, 2014 exclude accrued interest for the period then ended. Interest income or interest expense on trading loans, LHFS, LHFI, brokered
time deposits, and long-term debt that have been elected to be carried at fair value are recognized in interest income or interest expense in the Consolidated Statements of Income.
Fair Value Gain/(Loss) for the Year Ended
December 31, 2013 for Items Measured at Fair Value
Pursuant to Election of the FVO
(Dollars in millions) Trading
Income
Mortgage
Production
Related
Income 1
Mortgage
Servicing
Related
Income
Total Changes
in Fair Values
Included in
Current
Period
Earnings 2
Assets:
Trading loans $13 $— $— $13
LHFS 1 (135) — (134)
LHFI — (10) — (10)
MSRs — 4 50 54
Liabilities:
Brokered time deposits 8 — — 8
Long-term debt 36 — — 36
1 Income related to LHFS does not include income from IRLCs. For the year ended December 31, 2013, income related to MSRs includes mortgage servicing income recognized upon the
sale of loans reported at LOCOM.
2 Changes in fair value for the year ended December 31, 2013 exclude accrued interest for the period then ended. Interest income or interest expense on trading loans, LHFS, LHFI, brokered
time deposits, and long-term debt that have been elected to be carried at fair value are recognized in interest income or interest expense in the Consolidated Statements of Income.