v3.25.2
Fair Value Accounting (Tables)
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Gains and Losses from Fair Value Changes Included in Consolidated Statement of Operations
The following table presents unrealized gains and losses from fair value changes on junior subordinated debt:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in millions)
Unrealized losses$(5.4)$(0.7)$(3.9)$(1.4)
Changes included in OCI, net of tax(4.1)(0.5)(3.0)(1.0)
Fair Value of Assets and Liabilities
The fair value of assets and liabilities measured at fair value on a recurring basis was determined using the following inputs: 
Fair Value Measurements at the End of the Reporting Period Using:
Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Fair Value
June 30, 2025(in millions)
Assets:
Available-for-sale debt securities
Residential MBS issued by GSEs and GNMA$— $6,666 $— $6,666 
U.S. Treasury securities5,504 — — 5,504 
CLO— 1,901 — 1,901 
Private label residential MBS— 990 — 990 
Tax-exempt— 796 — 796 
Commercial MBS issued by GSEs and GNMA— 599 — 599 
Corporate debt securities— 374 — 374 
Other28 40 — 68 
Total AFS debt securities$5,532 $11,366 $— $16,898 
Trading securities
Residential MBS issued by GSEs and GNMA$— $53 $— $53 
Total trading securities$— $53 $— $53 
Equity securities
Preferred stock$63 $— $— $63 
Common stock32 — — 32 
CRA investments27 — — 27 
Total equity securities$122 $— $— $122 
Loans HFS (2)$— $2,896 $84 $2,980 
Mortgage servicing rights— — 1,044 1,044 
Derivative assets (1)— 119 57 176 
Liabilities:
Junior subordinated debt (3)$— $— $69 $69 
Derivative liabilities (1)— 203 — 203 
(1)See "Note 12. Derivatives and Hedging Activities." In addition, the carrying value of loans is decreased by $5 million as of June 30, 2025 for the effective portion of the hedge, which relates to the fair value of the hedges put in place to mitigate against fluctuations in interest rates. Derivative assets and liabilities exclude margin of $347 million and $(41) million, respectively.
(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
 Fair Value Measurements at the End of the Reporting Period Using:
Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Fair Value
December 31, 2024(in millions)
Assets:
Available-for-sale debt securities
Residential MBS issued by GSEs and GNMA$— $5,831 $— $5,831 
U.S. Treasury securities4,383 — — 4,383 
Private label residential MBS— 947 — 947 
Tax-exempt— 845 — 845 
CLO— 570 — 570 
Commercial MBS issued by GSEs and GNMA— 437 — 437 
Corporate debt securities— 386 — 386 
Other2 67 — 69 
Total AFS debt securities$4,385 $9,083 $— $13,468 
Equity securities
Preferred stock$91 $— $— $91 
CRA investments26 — — 26 
Total equity securities$117 $— $— $117 
Loans - HFS (2)$— $2,240 $4 $2,244 
Mortgage servicing rights— — 1,127 1,127 
Derivative assets (1)— 198 35 233 
Liabilities:
Junior subordinated debt (3)$— $— $65 $65 
Derivative liabilities (1)— 69 7 76 
(1)See "Note 12. Derivatives and Hedging Activities." In addition, the carrying value of loans is decreased by $96 million as of December 31, 2024 for the effective portion of the hedge, which relates to the fair value of the hedges put in place to mitigate against fluctuations in interest rates. Derivative assets and liabilities exclude margin of $72 million and $3 million, respectively.
(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
Change in Level 3 Liabilities Measured at Fair Value on Recurring Basis
The change in Level 3 liabilities measured at fair value on a recurring basis included in OCI was as follows:
Junior Subordinated Debt
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in millions)
Beginning balance$(63.2)$(63.5)$(64.7)$(62.8)
Change in fair value (1)(5.4)(0.7)(3.9)(1.4)
Ending balance$(68.6)$(64.2)$(68.6)$(64.2)
(1)Unrealized gains (losses) attributable to changes in the fair value of junior subordinated debt are recorded in OCI, net of tax, and totaled $(4.1) million and $(0.5) million for three months ended June 30, 2025 and 2024, respectively, and $(3.0) million and $(1.0) million for the six months ended June 30, 2025 and 2024, respectively.
The change in Level 3 assets and liabilities measured at fair value on a recurring basis included in income was as follows:
Three Months Ended June 30, 2025Six Months Ended June 30, 2025
Loans HFSMSRsIRLCs (1)Loans HFSMSRsIRLCs (1)
(in millions)
Balance, beginning of period$63 $1,241 $13 $3 $1,127 $(2)
Purchases and additions90 284 5,490 154 545 11,232 
Sales and payments(71)(452)— (80)(535)— 
Transfers from Level 2 to Level 32 — — 4 — — 
Settlement of IRLCs upon acquisition or origination of loans HFS— — (5,481)— — (11,213)
Change in fair value— 23 2 3 3 7 
Realization of cash flows— (52)— — (96)— 
Balance, end of period$84 $1,044 $24 $84 $1,044 $24 
Changes in unrealized gains for the period (2)$2 $3 $24 $3 $(6)$24 

Three Months Ended June 30, 2024Six Months Ended June 30, 2024
MSRsIRLCs (1)MSRsIRLCs (1)
(in millions)
Balance, beginning of period$1,178 $10 $1,124 $18 
Purchases and additions214 4,577 403 8,637 
Sales and payments(241)— (397)— 
Settlement of IRLCs upon acquisition or origination of loans HFS— (4,580)— (8,647)
Change in fair value32 1 92 — 
Realization of cash flows(38)— (77)— 
Balance, end of period$1,145 $8 $1,145 $8 
Changes in unrealized gains for the period (2)$31 $7 $69 $7 
(1)     IRLC asset and liability positions are presented net.
(2)    Amounts recognized as part of non-interest income.
The significant unobservable inputs used in the fair value measurements of these Level 3 assets and liabilities were as follows:
June 30, 2025
Asset/liabilityKey inputsRangeWeighted average
MSRs:Option adjusted spread (in basis points)
141 - 233
212 
Conditional prepayment rate (1)
9.9% - 20.9%
16.0 %
Recapture rate
20.0% - 20.0%
20.0 %
Servicing fee rate (in basis points)
25.0 - 56.5
35.3 
Cost to service
$77 - $83
$80 
Loans HFS:Lifetime liquidation probability
1.2% to 10.7%
5.0 %
IRLCs:Servicing fee multiple
4.2 - 6.2
5.2 
Pull-through rate
75% - 100%
89 %
December 31, 2024
Asset/liabilityKey inputsRangeWeighted average
MSRs:Option adjusted spread (in basis points)
21 - 315
237 
Conditional prepayment rate (1)
8.4% - 19.0%
14.0 %
Recapture rate
20.0% - 20.0%
20.0 %
Servicing fee rate (in basis points)
25.0 - 56.5
36.4 
Cost to service
$75 - $95
$82 
IRLCs:Servicing fee multiple
4.3 - 6.4
5.3 
Pull-through rate
76% - 100%
92 %
(1)    Lifetime total prepayment speed annualized.
For Level 3 assets measured at fair value on a nonrecurring basis as of period end, the significant unobservable inputs used in the fair value measurements were as follows:
June 30, 2025Valuation Technique(s)Significant Unobservable InputsRange
(in millions)
Loans HFI$300 Collateral methodThird party appraisalCosts to sell
6.0% to 10.0%
Discounted cash flow methodDiscount rateContractual loan rate
3.0% to 8.0%
Scheduled cash collectionsProbability of default
0% to 20.0%
Proceeds from non-real estate collateralLoss given default
0% to 70.0%
Other assets acquired through foreclosure218 Collateral methodThird party appraisalCosts to sell
1.0% to 6.0%
December 31, 2024Valuation Technique(s)Significant Unobservable InputsRange
(in millions)
Loans HFI$561 Collateral methodThird party appraisalCosts to sell
6.0% to 10.0%
Discounted cash flow methodDiscount rateContractual loan rate
3.0% to 8.0%
Scheduled cash collectionsProbability of default
0% to 20.0%
Proceeds from non-real estate collateralLoss given default
0% to 70.0%
Other assets acquired through foreclosure52 Collateral methodThird party appraisalCosts to sell
1.0% to 6.0%
Assets Measured at Fair Value on Nonrecurring Basis
The significant unobservable inputs used in the fair value measurements of these Level 3 liabilities were as follows:
June 30, 2025Valuation TechniqueSignificant Unobservable InputsInput Value
(in millions)
Junior subordinated debt$69 Discounted cash flowImplied credit rating of the Company6.30 %
 
December 31, 2024Valuation TechniqueSignificant Unobservable InputsInput Value
(in millions)
Junior subordinated debt$65 Discounted cash flowImplied credit rating of the Company7.43 %
The following table presents such assets carried on the Consolidated Balance Sheet by caption and by level within the ASC 825 hierarchy:
 Fair Value Measurements at the End of the Reporting Period Using
 TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)		Active Markets for Similar Assets
(Level 2)		Unobservable Inputs
(Level 3)
 (in millions)
As of June 30, 2025:
Loans HFI$300 $— $— $300 
Other assets acquired through foreclosure218 — — 218 
As of December 31, 2024:
Loans HFI$561 $— $— $561 
Other assets acquired through foreclosure52 — — 52 
Estimated Fair Value of Financial Instruments
The following is a summary of the difference between the aggregate fair value and the aggregate UPB of loans HFS for which the FVO has been elected:
June 30, 2025December 31, 2024
Fair valueUPBDifferenceFair valueUPBDifference
(in millions)
Loans HFS:
Current through 89 days delinquent$2,963 $2,854 $109 $2,244 $2,195 $49 
90 days or more delinquent17 16 1 — — — 
Total$2,980 $2,870 $110 $2,244 $2,195 $49 
The estimated fair value of the Company’s financial instruments is as follows:
June 30, 2025
Carrying AmountFair Value
Level 1Level 2Level 3Total
(in millions)
Financial assets:
Investment securities:
HTM$1,540 $— $1,368 $— $1,368 
AFS16,898 5,532 11,366 — 16,898 
Trading53 — 53 — 53 
Equity122 122 — — 122 
Derivative assets (1)176 — 119 57 176 
Loans HFS3,022 — 2,913 109 3,022 
Loans HFI, net55,544 — — 55,443 55,443 
Mortgage servicing rights1,044 — — 1,044 1,044 
Accrued interest receivable426 — 426 — 426 
Financial liabilities:
Deposits$71,107 $— $71,143 $— $71,143 
Other borrowings6,052 — 6,032 — 6,032 
Qualifying debt678 — 556 85 641 
Derivative liabilities (1)203 — 203 — 203 
Accrued interest payable132 — 132 — 132 
(1)    Derivative assets and liabilities exclude margin of $347 million and $(41) million, respectively.
December 31, 2024
Carrying AmountFair Value
Level 1Level 2Level 3Total
(in millions)
Financial assets:
Investment securities:
HTM$1,526 $— $1,309 $— $1,309 
AFS13,468 4,385 9,083 — 13,468 
Equity securities117 117 — — 117 
Derivative assets (1)233 — 198 35 233 
Loans HFS2,286 — 2,259 27 2,286 
Loans HFI, net53,302 — — 53,070 53,070 
Mortgage servicing rights1,127 — — 1,127 1,127 
Accrued interest receivable362 — 362 — 362 
Financial liabilities:
Deposits$66,341 $— $66,393 $— $66,393 
Other borrowings5,573 — 5,545 — 5,545 
Qualifying debt899 — 789 78 867 
Derivative liabilities (1)76 — 69 7 76 
Accrued interest payable138 — 138 — 138 
(1)    Derivative assets and liabilities exclude margin of $72 million and $3 million, respectively.