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Notes to Consolidated Financial Statements, continued
127
Impact of Derivative Instruments on the Consolidated Statements of Income and Shareholders’ Equity
The impacts of derivative instruments on the Consolidated
Statements of Income and the Consolidated Statements of
Shareholders’ Equity for the year ended December 31 are
presented below. The impacts are segregated between
derivatives that are designated in hedge accounting relationships
and those that are used for economic hedging or trading purposes,
with further identification of the underlying risks in the
derivatives and the hedged items, where appropriate. The tables
do not disclose the financial impact of the activities that these
derivative instruments are intended to hedge.
Year Ended December 31, 2015
(Dollars in millions)
Amount of
Pre-tax Gain
Recognized in OCI
on Derivatives
(Effective Portion)
Amount of
Pre-tax Gain
Reclassified from
AOCI into Income
(Effective Portion)
Classification of
Pre-tax Gain
Reclassified
from AOCI into Income
(Effective Portion)
Derivative instruments in cash flow hedging relationships:
Interest rate contracts hedging floating rate loans 1 $246 $169 Interest and fees on loans
1 During the year ended December 31, 2015, the Company also reclassified $92 million of pre-tax gains from AOCI into net interest income. These gains related to hedging
relationships that have been terminated or de-designated and are reclassified into earnings consistent with the pattern of net cash flows expected to be recognized.
Year Ended December 31, 2015
(Dollars in millions)
Amount of Loss
on Derivatives
Recognized in Income
Amount of Gain on
Related Hedged Items
Recognized in Income
Amount of Loss
Recognized in Income
on Hedges
(Ineffective Portion)
Derivative instruments in fair value hedging relationships:
Interest rate contracts hedging fixed rate debt 1($2) $1 ($1)
Interest rate contracts hedging brokered CDs 1— — —
Total ($2) $1 ($1)
1 Amounts are recognized in trading income in the Consolidated Statements of Income.
(Dollars in millions)
Classification of Gain/(Loss) Recognized
in Income on Derivatives
Amount of Gain/(Loss)
Recognized in Income on
Derivatives During the
Year Ended December 31, 2015
Derivative instruments not designated as hedging instruments:
Interest rate contracts hedging:
MSRs Mortgage servicing related income $19
LHFS, IRLCs Mortgage production related income (45)
LHFI Other noninterest income (1)
Trading activity Trading income 61
Foreign exchange rate contracts hedging trading activity Trading income 93
Credit contracts hedging:
Loans Other noninterest income (1)
Trading activity Trading income 23
Equity contracts hedging trading activity Trading income 4
Other contracts:
IRLCs Mortgage production related income 156
Commodities Trading income 2
Total $311