Investment Securities (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Our investment portfolio includes various debt and equity securities. Our debt securities, which are classified as available-for-sale or held-to-maturity, include government securities, corporate bonds, asset-backed securities, and mortgage-backed securities. The cost, fair value, and gross unrealized gains and losses on available-for-sale and held-to-maturity securities were as follows.



	2020								2019
	Amortized cost		Gross unrealized				Fair value		Amortized cost		Gross unrealized				Fair value
December 31, ($ in millions)			gains		losses						gains		losses
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	783	$	20	$	—	$	803	$	2,059	$	6	$	(17)	$	2,048
U.S. States and political subdivisions	1,046		50		(1)		1,095		623		19		(1)		641
Foreign government	167		9		—		176		184		3		(1)		186
Agency mortgage-backed residential	18,053		538		(3)		18,588		21,183		257		(36)		21,404
Mortgage-backed residential	2,595		49		(4)		2,640		2,841		20		(11)		2,850
Agency mortgage-backed commercial	4,063		139		(13)		4,189		1,344		44		(6)		1,382
Mortgage-backed commercial	—		—		—		—		41		1		—		42
Asset-backed	420		5		—		425		365		3		—		368
Corporate debt	1,809		105		—		1,914		1,327		37		(1)		1,363
Total available-for-sale securities (a) (b) (c) (d) (e)	$	28,936	$	915	$	(21)	$	29,830	$	29,967	$	390	$	(73)	$	30,284


Held-to-maturity securities
Debt securities
Agency mortgage-backed residential	$	1,253	$	79	$	(1)	$	1,331	$	1,547	$	38	$	(6)	$	1,579
Asset-backed retained notes	—		—		—		—		21		—		—		21
Total held-to-maturity securities (e) (f) (g)	$	1,253	$	79	$	(1)	$	1,331	$	1,568	$	38	$	(6)	$	1,600

(a)Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $13 million and $12 million at December 31, 2020, and December 31, 2019, respectively.

(b)Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 21 for additional information.

(c)Available-for-sale securities with a fair value of $145 million and $1.9 billion at December 31, 2020, and December 31, 2019, respectively, were pledged to secure advances from the FHLB, other short-term borrowings, or for other purposes as required by contractual obligation or law. Under these agreements, we granted the counterparty the right to sell or pledge $145 million and $118 million of the underlying investment securities at December 31, 2020, and December 31, 2019, respectively.

(d)Totals do not include accrued interest receivable, which was $90 million and $98 million at December 31, 2020, and December 31, 2019, respectively. Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.

(e)There was no allowance for credit losses recorded at December 31, 2020, as management determined that there were no expected credit losses in our portfolio of available-for-sale and held-to-maturity securities.

(f)Held-to-maturity securities with a fair value of $915 million at December 31, 2019, were pledged to secure advances from the FHLB. We did not pledge any held-to-maturity securities at December 31, 2020.

(g)Totals do not include accrued interest receivable, which was $3 million at both December 31, 2020, and 2019. Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.

Investments Classified by Contractual Maturity Date

The maturity distribution of debt securities outstanding is summarized in the following tables based upon contractual maturities. Call or prepayment options may cause actual maturities to differ from contractual maturities.


	Total				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years
($ in millions)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
December 31, 2020
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies	$	803	1.2	%	$	13	0.1	%	$	708	1.1	%	$	82	1.7	%	$	—	—	%
U.S. States and political subdivisions	1,095		3.0		49		1.4		103		2.3		228		2.7		715		3.3
Foreign government	176		2.1		9		1.7		86		2.3		81		1.9		—		—
Agency mortgage-backed residential	18,588		3.1		—		—		—		—		37		2.0		18,551		3.1
Mortgage-backed residential	2,640		3.1		—		—		—		—		36		2.9		2,604		3.1
Agency mortgage-backed commercial	4,189		1.9		—		—		—		—		1,628		2.3		2,561		1.7

Asset-backed	425		2.9		—		—		349		3.0		49		1.8		27		3.1
Corporate debt	1,914		2.7		155		2.7		625		2.9		1,077		2.6		57		2.1
Total available-for-sale securities	$	29,830	2.8		$	226	2.3		$	1,871	2.2		$	3,218	2.4		$	24,515	3.0
Amortized cost of available-for-sale securities	$	28,936			$	224			$	1,808			$	3,022			$	23,882
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	$	1,253	3.0	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,253	3.0	%

Total held-to-maturity securities	$	1,253	3.0		$	—	—		$	—	—		$	—	—		$	1,253	3.0
December 31, 2019
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies	$	2,048	1.5	%	$	65	2.1	%	$	1,590	1.4	%	$	393	1.7	%	$	—	—	%
U.S. States and political subdivisions	641		3.1		22		2.7		75		2.3		159		2.8		385		3.4
Foreign government	186		1.9		35		0.4		65		2.3		86		2.3		—		—
Agency mortgage-backed residential	21,404		3.2		—		—		—		—		47		2.0		21,357		3.2
Mortgage-backed residential	2,850		3.2		—		—		—		—		—		—		2,850		3.2
Agency mortgage-backed commercial	1,382		2.9		—		—		3		3.2		1,109		3.0		270		2.4
Mortgage-backed commercial	42		3.5		—		—		—		—		—		—		42		3.5
Asset-backed	368		3.5		—		—		317		3.6		5		2.7		46		3.0
Corporate debt	1,363		3.2		125		2.9		580		3.0		649		3.4		9		3.3
Total available-for-sale securities	$	30,284	3.1		$	247	2.3		$	2,630	2.1		$	2,448	2.8		$	24,959	3.2
Amortized cost of available-for-sale securities	$	29,967			$	246			$	2,624			$	2,378			$	24,719
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	$	1,547	3.2	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,547	3.2	%
Asset-backed retained notes	21		2.2		—		—		21		2.2		—		—		—		—
Total held-to-maturity securities	$	1,568	3.2		$	—	—		$	21	2.2		$	—	—		$	1,547	3.2

(a)Yield is calculated using the effective yield of each security at the end of the period, weighted based on the market value. The effective yield considers the contractual coupon and amortized cost, and excludes expected capital gains and losses.

Investment Income

The following table presents interest and dividends on investment securities.



Year ended December 31, ($ in millions)	2020		2019		2018
Taxable interest	$	654	$	858	$	690
Taxable dividends	21		14		14
Interest and dividends exempt from U.S. federal income tax	17		15		25
Interest and dividends on investment securities	$	692	$	887	$	729

Schedule of Realized Gain (Loss)

The following table presents gross gains and losses realized upon the sales of available-for-sale securities, and net gains or losses on equity securities held during the period.



Year ended December 31, ($ in millions)	2020		2019		2018
Available-for-sale securities
Gross realized gains	$	173	$	82	$	12
Gross realized losses (a)	(2)		(4)		(1)

Net realized gains on available-for-sale securities	171		78		11
Net realized gain on equity securities	107		73		60
Net unrealized gain (loss) on equity securities	29		92		(121)
Other gain (loss) on investments, net	$	307	$	243	$	(50)

(a)Certain available-for-sale securities were sold at a loss during the years ended December 31, 2020, 2019, and 2018, as a result of identifiable market events, or a loss that was realized based on corporate actions outside of our control (such as a call by the issuer). Any such sales were made in accordance with our risk-management policies and practices.

Held to Maturity Debt Securities by Credit Quality

The following table presents the credit quality of our held-to-maturity securities, based on the latest available information as of December 31, 2020. The credit ratings are sourced from nationally recognized statistical rating organizations, which include S&P, Moody’s, and Fitch. They represent a composite of the ratings or, where credit ratings cannot be sourced from the agencies, are presented based on the asset type. All of our held-to-maturity securities were current in their payment of principal and interest as of December 31, 2020. We have not recorded any interest income reversals on our held-to-maturity securities during the year ended December 31, 2020.


	December 31, 2020
($ in millions)	AA		Total (a)
Debt securities
Agency mortgage-backed residential	$	1,253	$	1,253

Total held-to-maturity securities	$	1,253	$	1,253

(a)Rating agencies indicate that they base their ratings on many quantitative and qualitative factors, which may include capital adequacy, liquidity, asset quality, business mix, level and quality of earnings, and the current operating, legislative, and regulatory environment. A credit rating is not a recommendation to buy, sell, or hold securities, and the ratings are subject to revision or withdrawal at any time by the assigning rating agency.

The following table summarizes held-to-maturity securities in an unrealized loss position at December 31, 2019, prior to the adoption of CECL, as defined by the previous accounting guidance in effect at that time.



	December 31, 2019
	Less than 12 months				12 months or longer
($ in millions)	Fair value		Unrealized loss		Fair value		Unrealized loss
Held-to-maturity securities
Debt securities
Agency mortgage-backed residential	$	283	$	(6)	$	—	$	—
Asset-backed retained notes	—		—		3		—
Total held-to-maturity debt securities	$	283	$	(6)	$	3	$	—

Schedule of Unrealized Loss on Investments

The following table summarizes available-for-sale securities in an unrealized loss position, which we evaluated to determine if a credit loss exists requiring the recognition of an allowance for credit losses. For additional information on our methodology, refer to Note 1. As of December 31, 2020, we did not have the intent to sell the available-for-sale securities with an unrealized loss position and we do not believe it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As a result of this evaluation, management determined that no credit reserves were required at December 31, 2020. We have not recorded any interest income reversals on our available-for-sale securities during the year ended December 31, 2020.



	2020								2019
	Less than 12 months				12 months or longer				Less than 12 months				12 months or longer
December 31, ($ in millions)	Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	3	$	—	$	—	$	—	$	1,267	$	(11)	$	279	$	(6)
U.S. States and political subdivisions	83		(1)		—		—		72		(1)		5		—
Foreign government	7		—		—		—		40		(1)		3		—
Agency mortgage-backed residential	1,225		(3)		—		—		4,606		(23)		908		(13)
Mortgage-backed residential	316		(4)		—		—		613		(4)		203		(7)
Agency mortgage-backed commercial	926		(13)		—		—		335		(6)		—		—

Asset-backed	11		—		—		—		8		—		11		—
Corporate debt	59		—		5		—		71		—		41		(1)
Total available-for-sale securities	$	2,630	$	(21)	$	5	$	—	$	7,012	$	(46)	$	1,450	$	(27)