Investment Securities (Tables)

3 Months Ended

Mar. 31, 2021

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.



	March 31, 2021								December 31, 2020
	Amortized cost		Gross unrealized				Fair value		Amortized cost		Gross unrealized				Fair value
($ in millions)			gains		losses						gains		losses
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	1,743	$	7	$	(44)	$	1,706	$	783	$	20	$	—	$	803
U.S. States and political subdivisions	1,031		36		(3)		1,064		1,046		50		(1)		1,095
Foreign government	169		5		(2)		172		167		9		—		176
Agency mortgage-backed residential	21,346		395		(223)		21,518		18,053		538		(3)		18,588
Mortgage-backed residential	2,284		30		(2)		2,312		2,595		49		(4)		2,640
Agency mortgage-backed commercial	4,272		74		(194)		4,152		4,063		139		(13)		4,189

Asset-backed	470		4		—		474		420		5		—		425
Corporate debt	2,021		53		(26)		2,048		1,809		105		—		1,914
Total available-for-sale securities (a) (b) (c) (d) (e)	$	33,336	$	604	$	(494)	$	33,446	$	28,936	$	915	$	(21)	$	29,830


Held-to-maturity securities
Debt securities
Agency mortgage-backed residential	$	1,197	$	66	$	(13)	$	1,250	$	1,253	$	79	$	(1)	$	1,331

Total held-to-maturity securities (e) (f)	$	1,197	$	66	$	(13)	$	1,250	$	1,253	$	79	$	(1)	$	1,331

(a)Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $13 million at both March 31, 2021, and December 31, 2020.

(b)Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 17 for additional information.

(c)Available-for-sale securities with a fair value of $163 million and $145 million at March 31, 2021, and December 31, 2020, respectively, were pledged for purposes as required by contractual obligation or law. Under these agreements, we granted the counterparty the right to sell or pledge the underlying investment securities.

(d)Totals do not include accrued interest receivable, which was $92 million and $90 million at March 31, 2021, and December 31, 2020, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.

(e)There was no allowance for credit losses recorded at March 31, 2021, or 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)Totals do not include accrued interest receivable, which was $3 million at both March 31, 2021, and December 31, 2020. Accrued interest receivable is included in other assets on our Condensed 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
March 31, 2021
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies	$	1,706	1.1	%	$	12	0.1	%	$	495	1.0	%	$	1,199	1.1	%	$	—	—	%
U.S. States and political subdivisions	1,064		3.0		44		1.5		106		2.5		227		2.6		687		3.2
Foreign government	172		1.9		14		1.8		94		1.9		64		1.9		—		—
Agency mortgage-backed residential	21,518		2.7		—		—		—		—		33		2.0		21,485		2.7
Mortgage-backed residential	2,312		3.0		—		—		—		—		32		2.9		2,280		3.0
Agency mortgage-backed commercial	4,152		1.9		—		—		—		—		1,675		2.3		2,477		1.7

Asset-backed	474		2.5		—		—		338		2.8		111		1.3		25		3.2
Corporate debt	2,048		2.4		127		2.8		804		2.5		1,097		2.4		20		2.3
Total available-for-sale securities	$	33,446	2.5		$	197	2.3		$	1,837	2.1		$	4,438	2.0		$	26,974	2.6
Amortized cost of available-for-sale securities	$	33,336			$	195			$	1,797			$	4,423			$	26,921
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	$	1,197	3.0	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,197	3.0	%

Total held-to-maturity securities	$	1,197	3.0		$	—	—		$	—	—		$	—	—		$	1,197	3.0
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

(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.


	Three months ended March 31,
($ in millions)		2021		2020
Taxable interest		$	114	$	205
Taxable dividends		5		5
Interest and dividends exempt from U.S. federal income tax		5		3
Interest and dividends on investment securities		$	124	$	213

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.


	Three months ended March 31,
($ in millions)		2021		2020
Available-for-sale securities
Gross realized gains		$	32	$	105


Net realized gains on available-for-sale securities		32		105
Net realized gain on equity securities		74		1
Net unrealized gain (loss) on equity securities		17		(185)
Other gain (loss) on investments, net		$	123	$	(79)

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 March 31, 2021, and 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 March 31, 2021, and December 31, 2020. We have not recorded any interest income reversals on our held-to-maturity securities during the three months ended March 31, 2021, or 2020.


	March 31, 2021			December 31, 2020
($ in millions)		AA		Total (a)		AA		Total (a)
Debt securities
Agency mortgage-backed residential		$	1,197	$	1,197	$	1,253	$	1,253

Total held-to-maturity securities		$	1,197	$	1,197	$	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.

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 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K. As of March 31, 2021, and 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 March 31, 2021, or December 31, 2020. We have not recorded any interest income reversals on our available-for-sale securities during the three months ended March 31, 2021, or 2020.


	March 31, 2021								December 31, 2020

	Less than 12 months				12 months or longer				Less than 12 months				12 months or longer
($ 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	$	1,297	$	(44)	$	—	$	—	$	3	$	—	$	—	$	—
U.S. States and political subdivisions	186		(3)		—		—		83		(1)		—		—
Foreign government	46		(2)		—		—		7		—		—		—
Agency mortgage-backed residential	9,289		(223)		—		—		1,225		(3)		—		—
Mortgage-backed residential	361		(2)		5		—		316		(4)		—		—
Agency mortgage-backed commercial	2,731		(194)		—		—		926		(13)		—		—

Asset-backed	68		—		—		—		11		—		—		—
Corporate debt	785		(26)		4		—		59		—		5		—
Total available-for-sale securities	$	14,763	$	(494)	$	9	$	—	$	2,630	$	(21)	$	5	$	—