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Fair Value
 6 Months Ended
Jun. 30, 2021
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 3 of our 2020 Form 10-K.
Quantitative Disclosure by Fair Value Hierarchy
Assets and liabilities measured at fair value by class on a recurring basis are summarized as follows:
(In millions)June 30, 2021
Level 1Level 2Level 3Total
ASSETS
Available-for-sale securities:
U.S. Treasury, agencies and corporations$128 $16,393 $— $16,521 
Municipal securities1,574 1,574 
Other debt securities75 75 
Total available-for-sale128 18,042 — 18,170 
Trading account15 166 181 
Other noninterest-bearing investments:
Bank-owned life insurance535 535 
Private equity investments 1
77 72 149 
Other assets:
Agriculture loan servicing and interest-only strips15 15 
Deferred compensation plan assets135 135 
Derivatives:
Derivatives designated as hedges9 9 
Derivatives not designated as hedges:
Interest rate272 272 
Foreign exchange4 4 
Total Assets$359 $19,024 $87 $19,470 
LIABILITIES
Securities sold, not yet purchased$62 $— $— $62 
Other liabilities:
Derivatives:
Derivatives not designated as hedges:
Interest rate40 40 
Foreign exchange4 4 
Total Liabilities$66 $40 $— $106 
1The Level 1 private equity investments relate to the portion of our SBIC investments that are now publicly traded.
(In millions)December 31, 2020
Level 1Level 2Level 3Total
ASSETS
Available-for-sale securities:
U.S. Treasury, agencies and corporations$192 $13,944 $— $14,136 
Municipal securities1,420 1,420 
Other debt securities175 175 
Total available-for-sale192 15,539 — 15,731 
Trading account111 155 266 
Other noninterest-bearing investments:
Bank-owned life insurance532 532 
Private equity investments80 80 
Other assets:
Agriculture loan servicing and interest-only strips16 16 
Deferred compensation plan assets120 120 
Derivatives:
Derivatives designated as hedges3 3 
Derivatives not designated as hedges:
Interest rate411 411 
Foreign exchange4 4 
Total Assets$427 $16,640 $96 $17,163 
LIABILITIES
Securities sold, not yet purchased$61 $— $— $61 
Other liabilities:
Derivatives:
Derivatives not designated as hedges:
Interest rate34 34 
Foreign exchange4 4 
Total Liabilities$65 $34 $— $99 
Level 3 Valuations
Our Level 3 holdings include private equity investments (“PEIs”), agriculture loan servicing, and interest-only strips. For additional information regarding the financial instruments measured under Level 3, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our 2020 Form 10-K.
During the second quarter of 2021, one of our SBIC investments measured under Level 3, Recursion Pharmaceuticals, Inc., completed an initial public offering (“IPO”), and as a result, we recognized a $63 million unrealized gain. This investment will be marked-to-market until we fully divest of our shares, which are subject to a minimum 180-day lock-up period from the IPO.
Rollforward of Level 3 Fair Value Measurements
The following schedule presents the changes to the assets and liabilities measured at fair value by class on a recurring basis using Level 3 inputs:
Level 3 Instruments
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(In millions)Private equity investmentsAg loan svcg and int-only stripsPrivate equity investmentsAg loan svcg and int-only stripsPrivate equity investmentsAg loan svcg and int-only stripsPrivate equity investmentsAg loan svcg and int-only strips
Balance at beginning of period
$83 $15 $79 $17 $80 $16 $107 $18 
Unrealized securities gains (losses), net68 — (4)— 69 — (24)— 
Other noninterest income (expense)— — — — (1)— (1)
Purchases2 — 2 — 6 — 3 — 
Cost of investments sold(4)— — — (6)— (9)— 
Redemptions and paydowns— — — — — 
Transfers out 1
(77)— — — (77)— — — 
Balance at end of period
$72 $15 $77 $17 $72 $15 $77 $17 
1 Represents the transfer of the SBIC investment in Recursion Pharmaceuticals, Inc. out of Level 3 to Level 1.
The rollforward of Level 3 fair value measurements includes the following realized gains and losses in the income statement:
(In millions)Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Securities gains (losses), net$(4)$— $(5)$15 
Nonrecurring Fair Value Measurements
The following schedule presents the balances of assets at period end that had fair value changes measured on a nonrecurring basis:
(In millions)Fair value at June 30, 2021Fair value at December 31, 2020
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
ASSETS
Private equity investments$— $— $— $— $— $— $1 $1 
Collateral-dependent loans— 9 — 9 — 14 — 14 
Other real estate owned— — — — — 1 — 1 
Total$— $9 $— $9 $— $15 $1 $16 
The fair values may not be current as of the periods presented, but rather as of the date the fair value change occurred, such as a charge for impairment. Accordingly, carrying values may not equal current fair value. During the three and six months ended June 30, 2021 and 2020, we had less than $1 million of gains or losses from fair value changes.
During the three and six months ended June 30, we recognized less than $1 million of net gains in 2021 and 2020 from the sale of other real estate owned (“OREO”) properties that had a carrying value, at the time of sale, of $2 million and $3 million during these same periods. Prior to their sale, we recognized no impairment on these properties during the three and six months ended June 30, 2021 and less than $1 million during the same periods in 2020.
Private equity investments (“PEIs”) carried at cost were measured at fair value for impairment purposes according to the methodology previously discussed for these investments. Amounts of PEIs carried at cost were $16 million at June 30, 2021 and $8 million at December 31, 2020. Amounts of other noninterest-bearing investments carried at cost were $108 million at June 30, 2021 and $109 million at December 31, 2020, which were comprised of Federal Reserve and FHLB stock. Private equity investments accounted for using the equity method were $66 million at June 30, 2021 and $61 million at December 31, 2020.
Loans that are collateral-dependent were measured at the lower of amortized cost or the fair value of the collateral. OREO was measured initially at fair value based on collateral appraisals at the time of transfer and subsequently at the lower of cost or fair value. For additional information regarding the measurement of fair value for impaired loans, collateral-dependent loans, and OREO, see Note 3 of our 2020 Form 10-K.
Fair Value of Certain Financial Instruments
Following is a summary of the carrying values and estimated fair values of certain financial instruments:
 June 30, 2021December 31, 2020
(In millions)Carrying
value		Estimated
fair value		LevelCarrying
value		Estimated
fair value		Level
Financial assets:
HTM investment securities$620 $622 2$636 $640 2
Loans and leases (including loans held for sale), net of allowance
50,929 51,436 352,780 53,221 3
Financial liabilities:
Time deposits1,940 1,949 22,588 2,603 2
Long-term debt1,308 1,338 21,336 1,346 2
This summary excludes financial assets and liabilities for which carrying value approximates fair value and financial instruments that are recorded at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value, see Note 3 of our 2020 Form 10-K.