Investment Securities

12 Months Ended

Dec. 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.



	2021								2020
	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	$	2,173	$	2	$	(20)	$	2,155	$	783	$	20	$	—	$	803
U.S. States and political subdivisions	841		27		(4)		864		1,046		50		(1)		1,095
Foreign government	157		2		(2)		157		167		9		—		176
Agency mortgage-backed residential	19,044		219		(224)		19,039		18,053		538		(3)		18,588
Mortgage-backed residential	4,448		11		(34)		4,425		2,595		49		(4)		2,640
Agency mortgage-backed commercial	4,573		66		(113)		4,526		4,063		139		(13)		4,189

Asset-backed	536		1		(3)		534		420		5		—		425
Corporate debt	1,878		30		(21)		1,887		1,809		105		—		1,914
Total available-for-sale securities (a) (b) (c) (d) (e)	$	33,650	$	358	$	(421)	$	33,587	$	28,936	$	915	$	(21)	$	29,830


Held-to-maturity securities
Debt securities
Agency mortgage-backed residential	$	1,170	$	48	$	(14)	$	1,204	$	1,253	$	79	$	(1)	$	1,331

Total held-to-maturity securities (e) (f)	$	1,170	$	48	$	(14)	$	1,204	$	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 December 31, 2021, and December 31, 2020.

(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 $203 million and $145 million at December 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 $84 million and $90 million at December 31, 2021, and December 31, 2020, 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, 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 December 31, 2021, and December 31, 2020. Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.

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, 2021
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies	$	2,155	1.1	%	$	288	1.0	%	$	525	0.9	%	$	1,342	1.2	%	$	—	—	%
U.S. States and political subdivisions	864		3.0		26		1.6		77		2.8		128		3.3		633		3.0
Foreign government	157		1.9		2		2.1		97		2.0		58		1.8		—		—
Agency mortgage-backed residential	19,039		2.5		—		—		—		—		26		2.0		19,013		2.5
Mortgage-backed residential	4,425		2.6		—		—		—		—		23		2.9		4,402		2.6
Agency mortgage-backed commercial	4,526		1.9		—		—		26		2.4		1,578		2.4		2,922		1.7

Asset-backed	534		1.9		—		—		350		2.0		175		1.5		9		3.4
Corporate debt	1,887		2.3		54		2.9		830		2.3		994		2.3		9		2.5
Total available-for-sale securities	$	33,587	2.3		$	370	1.3		$	1,905	1.9		$	4,324	2.0		$	26,988	2.4
Amortized cost of available-for-sale securities	$	33,650			$	368			$	1,893			$	4,291			$	27,098
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	$	1,170	2.8	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,170	2.8	%

Total held-to-maturity securities	$	1,170	2.8		$	—	—		$	—	—		$	—	—		$	1,170	2.8
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.

The balances of cash equivalents were $40 million and $25 million at December 31, 2021, and December 31, 2020, respectively, and were composed primarily of money-market funds and short-term securities, including U.S. Treasury bills.

The following table presents interest and dividends on investment securities.



Year ended December 31, ($ in millions)	2021		2020		2019
Taxable interest	$	533	$	654	$	858
Taxable dividends	27		21		14
Interest and dividends exempt from U.S. federal income tax	19		17		15
Interest and dividends on investment securities	$	579	$	692	$	887

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)	2021		2020		2019
Available-for-sale securities
Gross realized gains	$	102	$	173	$	82
Gross realized losses (a)	—		(2)		(4)

Net realized gains on available-for-sale securities	102		171		78
Net realized gain on equity securities	190		107		73
Net unrealized (loss) gain on equity securities	(7)		29		92
Other gain on investments, net	$	285	$	307	$	243

(a)Certain available-for-sale securities were sold at a loss during the years ended December 31, 2020, and 2019, as a result of identifiable market or credit events, or a loss 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.

The following table presents the credit quality of our held-to-maturity securities, based on the latest available information as of December 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 December 31, 2021, and December 31, 2020. We have not recorded any interest income reversals on our held-to-maturity securities during the years ended December 31, 2021, or 2020.


	2021		2020
December 31, ($ in millions)	AA		Total (a)		AA		Total (a)
Debt securities
Agency mortgage-backed residential	$	1,170	$	1,170	$	1,253	$	1,253

Total held-to-maturity securities	$	1,170	$	1,170	$	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 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, 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. We have not recorded any interest income reversals on our available-for-sale securities during the years ended December 31, 2021, or 2020.


	2021								2020

	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	$	1,682	$	(20)	$	—	$	—	$	3	$	—	$	—	$	—
U.S. States and political subdivisions	160		(3)		31		(1)		83		(1)		—		—
Foreign government	76		(2)		7		—		7		—		—		—
Agency mortgage-backed residential	12,244		(223)		38		(1)		1,225		(3)		—		—
Mortgage-backed residential	3,243		(34)		22		—		316		(4)		—		—
Agency mortgage-backed commercial	2,553		(70)		749		(43)		926		(13)		—		—

Asset-backed	360		(3)		—		—		11		—		—		—
Corporate debt	970		(18)		49		(3)		59		—		5		—
Total available-for-sale securities	$	21,288	$	(373)	$	896	$	(48)	$	2,630	$	(21)	$	5	$	—

During the years ended December 31, 2021, and 2020, management determined that there were no expected credit losses for securities in an unrealized loss position. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer, default rates, industry analyst reports, credit ratings, and other relevant information, which indicated that contractual cash flows are expected to occur. As a result of this evaluation, management determined that no credit reserves were required at December 31, 2021, or December 31, 2020.