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Investments
 6 Months Ended
Jun. 30, 2024
Investments [Abstract]  
INVESTMENTS INVESTMENTS
Investment Securities
Investment securities are classified as held-to-maturity (“HTM”), available-for-sale (“AFS”), or trading. HTM securities, which management has the intent and ability to hold until maturity, are carried at amortized cost. The amortized cost amounts represent the original cost of the investments, adjusted for related amortization or accretion of any purchase premiums or discounts, and for any impairment losses, including credit-related impairment. AFS securities are carried at fair value, and changes in fair value (unrealized gains and losses) are reported as net increases or decreases to accumulated other comprehensive income (“AOCI”), net of related taxes. Trading securities are carried at fair value with gains and losses recognized in current period earnings.
The carrying values of our securities do not include accrued interest receivables of $61 million and $65 million at June 30, 2024 and December 31, 2023, respectively. These receivables are included in “Other assets” on the consolidated balance sheet.
When a security is transferred from AFS to HTM, the difference between its amortized cost basis and fair value at the date of transfer is amortized as a yield adjustment through interest income, and the fair value at the date of transfer results in either a premium or discount to the amortized cost basis of the HTM securities. The amortization of unrealized gains or losses reported in AOCI will offset the effect of the amortization of the premium or discount in interest income that is created by the transfer. The discount associated with securities previously transferred from AFS to HTM was $2.0 billion ($1.5 billion after tax) and $2.1 billion ($1.5 billion after tax) at June 30, 2024 and December 31, 2023, respectively.
See Notes 3 and 5 of our 2023 Form 10-K for more information regarding our process to estimate the fair value and accounting for our investment securities, respectively. The following schedule presents the amortized cost and estimated fair values of our HTM and AFS securities:
June 30, 2024
(In millions)Amortized
cost
Gross unrealized gains 1
Gross unrealized lossesEstimated
fair value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities$152 $— $8 $144 
Agency guaranteed mortgage-backed securities9,583 2 148 9,437 
Municipal securities330 — 20 310 
Total held-to-maturity10,065 2 176 9,891 
Available-for-sale
U.S. Treasury securities570 — 109 461 
U.S. Government agencies and corporations:
Agency securities503 — 32 471 
Agency guaranteed mortgage-backed securities8,124 1 1,302 6,823 
Small Business Administration loan-backed securities516 — 23 493 
Municipal securities1,302 — 91 1,211 
Other debt securities25 — 1 24 
Total available-for-sale11,040 1 1,558 9,483 
Total HTM and AFS investment securities$21,105 $3 $1,734 $19,374 
December 31, 2023
(In millions)Amortized
cost
Gross unrealized gains 1
Gross unrealized lossesEstimated
fair value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities$93 $— $6 $87 
Agency guaranteed mortgage-backed securities9,935 156 50 10,041 
Municipal securities354 — 16 338 
Total held-to-maturity10,382 156 72 10,466 
Available-for-sale
U.S. Treasury securities585 — 93 492 
U.S. Government agencies and corporations:
Agency securities663 — 33 630 
Agency guaranteed mortgage-backed securities8,530 — 1,239 7,291 
Small Business Administration loan-backed securities571 — 25 546 
Municipal securities1,385 — 67 1,318 
Other debt securities25 — 2 23 
Total available-for-sale11,759 — 1,459 10,300 
Total HTM and AFS investment securities$22,141 $156 $1,531 $20,766 
1 Gross unrealized gains for the respective AFS security categories were individually less than $1 million.
Maturities
The following schedule presents the amortized cost and weighted average yields of debt securities by contractual maturity of principal payments at June 30, 2024. This schedule does not reflect the duration of the portfolio, which would incorporate amortization, expected prepayments, interest rate resets, and fair value hedges; the effects of which result in measured durations shorter than contractual maturities.
June 30, 2024
Total
debt securities		Due in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten years
(Dollar amounts in millions)Amortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yield
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities$152 4.18 %$— — %$— — %$— — %$152 4.18 %
Agency guaranteed mortgage-backed securities
9,583 1.85 — — — — 43 1.92 9,540 1.85 
Municipal securities 1
330 3.17 33 2.61 127 2.91 155 3.48 15 3.46 
Total held-to-maturity securities10,065 1.93 33 2.61 127 2.91 198 3.14 9,707 1.89 
Available-for-sale
U.S. Treasury securities570 3.20 168 5.26 — — — — 402 2.35 
U.S. Government agencies and corporations:
Agency securities503 3.04 38 3.94 106 2.86 209 2.95 150 3.07 
Agency guaranteed mortgage-backed securities8,124 2.03 13 1.13 116 1.78 1,373 2.14 6,622 2.01 
Small Business Administration loan-backed securities516 5.50 1 3.57 16 6.50 133 4.35 366 5.87 
Municipal securities 1
1,302 2.22 145 2.79 409 2.62 688 1.86 60 2.29 
Other debt securities25 8.76 — — 10 9.52 — — 15 8.26 
Total available-for-sale securities
11,040 2.35 365 3.99 657 2.71 2,403 2.25 7,615 2.25 
Total HTM and AFS investment securities$21,105 2.14 %$398 3.88 %$784 2.74 %$2,601 2.32 %$17,322 2.05 %
1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.
The following schedule presents gross unrealized losses for AFS securities and the estimated fair value by length of time the securities have been in an unrealized loss position:
June 30, 2024
Less than 12 months12 months or moreTotal
(In millions)Gross
unrealized
losses		Estimated
fair
value		Gross
unrealized
losses		Estimated
fair
value		Gross
unrealized
losses		Estimated
fair
value
Available-for-sale
U.S. Treasury securities$— $10 $109 $293 $109 $303 
U.S. Government agencies and corporations:
Agency securities— 1 32 458 32 459 
Agency guaranteed mortgage-backed securities— 19 1,302 6,681 1,302 6,700 
Small Business Administration loan-backed securities— 1 23 438 23 439 
Municipal securities1 25 90 1,143 91 1,168 
Other— — 1 14 1 14 
Total available-for-sale investment securities$1 $56 $1,557 $9,027 $1,558 $9,083 
December 31, 2023
Less than 12 months12 months or moreTotal
(In millions)Gross
unrealized
losses		Estimated
 fair
 value		Gross
unrealized
losses		Estimated
 fair
 value		Gross
unrealized
losses		Estimated
 fair
 value
Available-for-sale
U.S. Treasury securities$— $— $93 $308 $93 $308 
U.S. Government agencies and corporations:
Agency securities— 5 33 605 33 610 
Agency guaranteed mortgage-backed securities71 312 1,168 6,902 1,239 7,214 
Small Business Administration loan-backed securities— 4 25 484 25 488 
Municipal securities2 229 65 1,061 67 1,290 
Other— — 2 13 2 13 
Total available-for-sale investment securities$73 $550 $1,386 $9,373 $1,459 $9,923 
At June 30, 2024 and December 31, 2023, approximately 2,811 and 2,998 AFS investment securities were in an unrealized loss position, respectively.
Impairment
On a quarterly basis, we review our investment securities portfolio for the presence of impairment on an individual security basis. For additional information on our policy and impairment evaluation process for investment securities, see Note 5 of our 2023 Form 10-K.
AFS Impairment
We did not recognize any impairment on our AFS investment securities portfolio during the first six months of both 2024 and 2023. Unrealized losses primarily relate to higher interest rates subsequent to the purchase of securities and are not attributable to credit; as such, absent any future sales, we would expect to receive the full principal value at maturity. At June 30, 2024, we had not initiated any sales of AFS securities, nor did we have an intent to sell any identified securities with unrealized losses. We do not believe it is more likely than not that we would be required to sell such securities before recovery of their amortized cost basis.
HTM Impairment
For HTM securities, the allowance for credit losses (“ACL”) is assessed consistent with the approach described in Note 6 for loans and leases measured at amortized cost. At June 30, 2024, the ACL on HTM securities was less than $1 million, all HTM securities were risk-graded as “Pass” in terms of credit quality, and none were considered past due.
Securities Gains and Losses Recognized in Income
The following schedule presents securities gains and losses recognized in income:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In millions)Gross gainsGross lossesGross gainsGross lossesGross gainsGross lossesGross gainsGross losses
Available-for-sale$— $— $71 $71 $— $— $72 $73 
Trading1 1 7 7 11 10 10 9 
Other noninterest-bearing investments14 10 10 10 20 19 13 12 
Total gains15 11 88 88 31 29 95 94 
Net gains (losses) 1
$4 $— $2 $1 
1 Net gains (losses) were included in “Securities gains (losses), net” on the consolidated statement of income.
The following schedule presents interest income by security type:
Three Months Ended June 30,
20242023
(In millions)TaxableNontaxableTotalTaxableNontaxableTotal
Investment securities:
Held-to-maturity$55 $1 $56 $59 $1 $60 
Available-for-sale75 8 83 69 8 77 
Trading— 1 1 — 1 1 
Total securities$130 $10 $140 $128 $10 $138 
Six Months Ended June 30,
20242023
(In millions)TaxableNontaxableTotalTaxableNontaxableTotal
Investment securities:
Held-to-maturity$111 $2 $113 $120 $2 $122 
Available-for-sale152 16 168 138 14 152 
Trading— 1 1 — 1 1 
Total securities$263 $19 $282 $258 $17 $275