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FAIR VALUE
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
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 2023 Form 10-K.
Fair Value Hierarchy
The following schedule presents assets and liabilities measured at fair value on a recurring basis:
(In millions)September 30, 2024
Level 1Level 2Level 3Total
ASSETS
Trading securities$— $68 $— $68 
Available-for-sale securities:
U.S. Treasury, agencies, and corporations490 7,792 8,282 
Municipal securities1,189 1,189 
Other debt securities24 24 
Total available-for-sale490 9,005 — 9,495 
Loans held for sale58 58 
Other noninterest-bearing investments:
Bank-owned life insurance560 560 
Private equity investments 1
3 105 108 
Other assets:
Agriculture loan servicing19 19 
Deferred compensation plan assets139 139 
Derivatives382 382 
Total assets$632 $10,073 $124 $10,829 
LIABILITIES
Securities sold, not yet purchased$4 $— $— $4 
Other liabilities:
Derivatives295 295 
Total liabilities$4 $295 $— $299 
1 The Level 1 private equity investments (“PEIs”) generally relate to the portion of our Small Business Investment Company (“SBIC”) investments and other similar investments that are publicly traded.
(In millions)December 31, 2023
Level 1Level 2Level 3Total
ASSETS
Trading securities$— $48 $— $48 
Available-for-sale securities:
U.S. Treasury, agencies, and corporations492 8,467 8,959 
Municipal securities1,318 1,318 
Other debt securities23 23 
Total available-for-sale492 9,808 — 10,300 
Loans held for sale43 43 
Other noninterest-bearing investments:
Bank-owned life insurance553 553 
Private equity investments 1
3 92 95 
Other assets:
Agriculture loan servicing19 19 
Deferred compensation plan assets124 124 
Derivatives420 420 
Total assets$619 $10,872 $111 $11,602 
LIABILITIES
Securities sold, not yet purchased$65 $— $— $65 
Other liabilities:
Derivatives333 333 
Total liabilities$65 $333 $— $398 
1 The Level 1 PEIs generally relate to the portion of our SBIC investments and other similar investments that are publicly traded.
Fair Value Option for Certain Loans Held for Sale
We have elected the fair value option for certain commercial real estate (“CRE”) loans that are intended for sale to a third-party conduit for securitization and are hedged with derivative instruments. Electing the fair value option reduces the accounting volatility that would otherwise result from the asymmetry created by accounting for the loans held for sale at the lower of cost or fair value and the derivatives at fair value, without the complexity of applying hedge accounting. These loans are included in “Loans held for sale” on the consolidated balance sheet, and associated fair value gains and losses are included in “Capital markets fees” on the consolidated statement of income, while accrued interest is included in “Interest and fees on loans.”
At September 30, 2024 and December 31, 2023, we had $58 million and $43 million of loans measured at fair value ($58 million and $43 million par value), respectively. During the first nine months of 2024 and 2023, we recognized approximately $10 million and $3 million of net gains from loan sales and valuation adjustments of loans carried at fair value and the associated derivatives, respectively.
Level 3 Valuations
Our Level 3 financial instruments include PEIs and agriculture loan servicing. 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 2023 Form 10-K.
Roll-forward of Level 3 Fair Value Measurements
The following schedule presents a roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:
Level 3 Instruments
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
(In millions)Private equity investmentsAg loan servicingPrivate equity investmentsAg loan servicingPrivate equity investmentsAg loan servicingPrivate equity investmentsAg loan servicing
Balance at beginning of period
$101 $20 $84 $17 $92 $19 $81 $14 
Unrealized securities gains (losses), net5 — 2 — 7 — (1)— 
Other noninterest income (expense)— (1)— — — — — 4 
Purchases1 — 3 — 10 — 9 (1)
Cost of investments sold(2)— — — (4)— — — 
Transfers out— — — — — — — — 
Balance at end of period
$105 $19 $89 $17 $105 $19 $89 $17 
The roll-forward of Level 3 instruments includes the following realized gains and losses recognized in “Securities gains (losses), net” on the consolidated statement of income for the periods presented:
(In millions)Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Securities gains (losses), net$(2)$— $(1)$— 
Nonrecurring Fair Value Measurements
Certain assets and liabilities may be measured at fair value on a nonrecurring basis, including impaired loans that have been measured based on the fair value of the underlying collateral, other real estate owned (“OREO”), and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally include changes in value resulting from observable price changes for equity investments without readily determinable fair values, write-downs of individual assets, or the application of lower of cost or fair value accounting. At September 30, 2024, we had approximately $1 million of collateral-dependent loans marked to fair value and classified in Level 2. During the third quarter of 2024, we recognized $1 million of losses from fair value changes related to these loans. For additional information regarding assets and liabilities measured at fair value on a nonrecurring basis, see Note 3 of our 2023 Form 10-K.
Fair Value of Certain Financial Instruments
The following schedule presents the carrying values and estimated fair values of certain financial instruments:
 September 30, 2024December 31, 2023
(In millions)Carrying
value
Fair value		LevelCarrying
value		Fair valueLevel
Financial assets:
Held-to-maturity investment securities$9,857 $10,024 2$10,382 $10,466 2
Loans and leases (including loans held for sale), net of allowance
58,287 55,905 357,148 54,832 3
Financial liabilities:
Time deposits11,503 11,497 29,996 9,964 2
Long-term debt548 533 2542 494 2
The preceding schedule does not include certain financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which the carrying value approximates fair value. 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 2023 Form 10-K.