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Fair Value
 9 Months Ended
Sep. 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)September 30, 2021
Level 1Level 2Level 3Total
ASSETS
Available-for-sale securities:
U.S. Treasury, agencies and corporations$128 $18,702 $— $18,830 
Municipal securities1,556 1,556 
Other debt securities75 75 
Total available-for-sale128 20,333 — 20,461 
Trading account66 239 305 
Other noninterest-bearing investments:
Bank-owned life insurance535 535 
Private equity investments 1
50 72 122 
Other assets:
Agriculture loan servicing and interest-only strips14 14 
Deferred compensation plan assets137 137 
Derivatives:
Derivatives designated as hedges10 10 
Derivatives not designated as hedges:
Interest rate248 248 
Foreign exchange4 4 
Total assets$385 $21,365 $86 $21,836 
LIABILITIES
Securities sold, not yet purchased$32 $— $— $32 
Other liabilities:
Derivatives:
Derivatives not designated as hedges:
Interest rate41 41 
Foreign exchange4 4 
Total liabilities$36 $41 $— $77 
1 The 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 our Level 3 financial instruments, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our 2020 Form 10-K.
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 EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 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
$72 $15 $77 $17 $80 $16 $107 $18 
Unrealized securities gains (losses), net10 — 1 — 79 — (24)— 
Other noninterest income (expense)— (1)— — — (2)— (1)
Purchases4 — 3 — 10 — 7 — 
Cost of investments sold(13)— — — (19)— (9)— 
Transfers out 1
(1)— — — (78)— — — 
Balance at end of period
$72 $14 $81 $17 $72 $14 $81 $17 
1 Represents the transfer of the SBIC investments that are now publicly traded out of Level 3 and into Level 1.
The rollforward of Level 3 fair value measurements includes the following realized gains and losses in the income statement:
(In millions)Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Securities gains (losses), net$(6)$— $(11)$15 
Nonrecurring Fair Value Measurements
The following schedule presents asset balances at period end that had fair value changes measured on a nonrecurring basis:
(In millions)Fair value at September 30, 2021Fair value at December 31, 2020
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Private equity investments$— $— $— $— $— $— $1 $1 
Collateral-dependent loans— 1 — 1 — 14 — 14 
Other real estate owned (OREO)— — — — — 1 — 1 
Total$— $1 $— $1 $— $15 $1 $16 
The fair values presented above 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.
PEIs carried at cost were $18 million at September 30, 2021 and $8 million at December 31, 2020. Other noninterest-bearing investments carried at cost were $102 million at September 30, 2021 and $109 million at December 31, 2020, which were comprised of Federal Reserve and FHLB stock. PEIs accounted for using the equity method were $74 million at September 30, 2021 and $61 million at December 31, 2020.
Collateral-dependent loans were measured at the lower of amortized cost or the fair value of the collateral. Other real estate owned (“OREO”) assets were 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:
 September 30, 2021December 31, 2020
(In millions)Carrying
value		Estimated
fair value		LevelCarrying
value		Estimated
fair value		Level
Financial assets:
HTM investment securities$459 $461 2$636 $640 2
Loans and leases (including loans held for sale), net of allowance
50,254 50,648 352,780 53,221 3
Financial liabilities:
Time deposits1,688 1,695 22,588 2,603 2
Long-term debt1,020 1,056 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.