Wells Fargo 2014 Annual Report Download - page 161

Other-Than-Temporarily Impaired Debt Securities
The following table shows the detail of OTTI write-downs on
available-for-sale debt securities included in earnings and the
related changes in OCI for the same securities.
Year ended December 31,
(in millions) 2014 2013 2012
OTTI on debt securities
Recorded as part of gross realized losses:
Credit-related OTTI $ 40 107 237
Intent-to-sell OTTI 9 51 3
Total recorded as part of gross realized losses 49 158 240
Changes to OCI for losses (reversal of losses) in non-credit-related OTTI (1):
Securities of U.S. states and political subdivisions — (2) 1
Residential mortgage-backed securities (10) (27) (178)
Commercial mortgage-backed securities (21) (90) (88)
Corporate debt securities — — 1
Collateralized loan and other debt obligations — (1) (1)
Other debt securities — 1 28
Total changes to OCI for non-credit-related OTTI (31) (119) (237)
Total OTTI losses recorded on debt securities $ 18 39 3
(1) Represents amounts recorded to OCI for impairment, due to factors other than credit, on debt securities that have also had credit-related OTTI write-downs during the
period. Increases represent initial or subsequent non-credit-related OTTI on debt securities. Decreases represent partial to full reversal of impairment due to recoveries in
the fair value of securities due to non-credit factors.
The following table presents a rollforward of the OTTI credit Recognized credit loss represents the difference between the
loss that has been recognized in earnings as a write-down of present value of expected future cash flows discounted using the
available-for-sale debt securities we still own (referred to as security’s current effective interest rate and the amortized cost
"credit-impaired" debt securities) and do not intend to sell. basis of the security prior to considering credit loss.
Year ended December 31,
(in millions) 2014 2013 2012
Credit loss recognized, beginning of year $ 1,171 1,289 1,272
Additions:
For securities with initial credit impairments 5 21 55
For securities with previous credit impairments 35 86 182
Total additions 40 107 237
Reductions:
For securities sold, matured, or intended/required to be sold (169) (194) (194)
For recoveries of previous credit impairments (1) (17) (31) (26)
Total reductions (186) (225) (220)
Credit loss recognized, end of year $ 1,025 1,171 1,289
(1) Recoveries of previous credit impairments result from increases in expected cash flows subsequent to credit loss recognition. Such recoveries are reflected prospectively as
interest yield adjustments using the effective interest method.
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