INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

5. INVESTMENT SECURITIES

The Company’s investment securities consist of available-for-sale (AFS) securities, which are debt securities, U.S. Treasury bonds and mutual funds. The Company also holds equity securities within its investment securities portfolio. Collectively, these investments are carried at fair value on the Consolidated Balance Sheets within Investment securities.

For any AFS debt securities in an unrealized loss position, the CECL methodology requires estimation of the lifetime expected credit losses which then would be recognized in the Consolidated Statements of Income by establishing, or adjusting an existing allowance for those credit losses. The Company did not have any such credit losses for the periods presented. Any unrealized gains, or any portion of a security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. The Company typically invests in highly-rated securities with low probabilities of default.

Gains and losses on investments in equity securities are recorded in Other non-interest expenses in the Consolidated Statements of Income.

Realized gains and losses are recognized upon disposition of the investment securities, using the specific identification method. The table below reflects unrealized gains and losses as of June 30, 2022 and December 31, 2021, respectively:

	June 30, 2022								December 31, 2021
	Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value
(Millions)
Available-for-sale securities	$	171	$	—	$	(15)	$	156	$	173	$	4	$	(2)	$	175
Equity securities		68		—		—		68		64		—		—		64
Total	$	239	$	—	$	(15)	$	224	$	237	$	4	$	(2)	$	239

The following table provides information about the Company’s AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position, as of June 30, 2022 and December 31, 2021, respectively.

	June 30, 2022
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(Millions)
Available-for-sale securities	$	131	$	(10)	$	25	$	(5)	$	156	$	(15)
Total	$	131	$	(10)	$	25	$	(5)	$	156	$	(15)

	December 31, 2021
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(Millions)
Available-for-sale securities	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)
Total	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)

As of June 30, 2022, the amortized cost and estimated fair value of the Company’s AFS debt securities, which are mortgage-backed securities with no stated maturities, was $171 million and $156 million, respectively.

There were no realized gains or losses from the sale of any investment securities for the three and six months ended June 30, 2022 and 2021.