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Investment Securities
 3 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
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, 2024December 31, 2023
Amortized costGross unrealized
Fair value
Amortized costGross unrealized
Fair value
($ in millions)gainslossesgainslosses
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies$2,286 $— $(229)$2,057 $2,284 $— $(209)$2,075 
U.S. States and political subdivisions720 — (77)643 727 1 (70)658 
Foreign government191 1 (10)182 190 1 (8)183 
Agency mortgage-backed residential (a)17,831 — (3,079)14,752 18,122 1 (2,739)15,384 
Mortgage-backed residential264 — (45)219 268 — (43)225 
Agency mortgage-backed commercial (a)4,634 1 (835)3,800 4,539 2 (783)3,758 
Asset-backed310 — (9)301 344 — (12)332 
Corporate debt1,878 2 (150)1,730 1,942 4 (146)1,800 
Total available-for-sale securities (b) (c) (d) (e) (f)$28,114 $4 $(4,434)$23,684 $28,416 $9 $(4,010)$24,415 
Held-to-maturity securities
Debt securities
Agency mortgage-backed residential$984 $— $(194)$790 $999 $— $(173)$826 
Mortgage-backed residential3,544 171 — 3,715 3,603 221 — 3,824 
Asset-backed retained notes127 1 — 128 78 1 — 79 
Total held-to-maturity securities (d) (f) (g)$4,655 $172 $(194)$4,633 $4,680 $222 $(173)$4,729 
(a)Fair value includes basis adjustments for securities in closed portfolios with active hedges under the portfolio layer method. This includes a $77 million liability and a $46 million asset for agency mortgage-backed residential securities at March 31, 2024, and December 31, 2023, respectively, and a $32 million liability and $29 million asset for agency mortgage-backed commercial securities at March 31, 2024, and December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 19 for additional information.
(b)Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 19 for additional information.
(c)Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $12 million at both March 31, 2024, and December 31, 2023.
(d)Investment securities with a fair value of $3.7 billion and $4.7 billion were pledged as collateral at March 31, 2024, and December 31, 2023, respectively. This primarily included $3.2 billion and $3.3 billion pledged to secure advances from the FHLB at March 31, 2024, and December 31, 2023, respectively. This also included securities pledged for other purposes as required by contractual obligations or law, under which agreements we granted the counterparty the right to sell or pledge $569 million and $1.4 billion of the underlying available-for-sale securities at March 31, 2024, and December 31, 2023, respectively.
(e)Totals do not include accrued interest receivable, which was $75 million and $76 million at March 31, 2024, and December 31, 2023, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
(f)There was no allowance for credit losses recorded at both March 31, 2024, or December 31, 2023, as management determined that there were no expected credit losses in our portfolio of available-for-sale and held-to-maturity securities.
(g)Totals do not include accrued interest receivable, which was $13 million at both March 31, 2024, and December 31, 2023. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
In the fourth quarter of 2023, non-agency mortgage-backed residential securities with a fair value of $3.6 billion were transferred from available-for-sale to held-to-maturity. At the time of the transfer, $911 million of unrealized losses were retained in accumulated other comprehensive loss on our Condensed Consolidated Balance Sheet. The transfer of these securities to held-to-maturity reduces our exposure to fluctuations in accumulated other comprehensive loss on our Condensed Consolidated Balance Sheet that can result from unrealized losses on available-for-sale securities due to changes in market interest rates. The unrealized loss at the time of transfer is amortized over the remaining life of the security, offsetting the amortization of the security’s premium or discount, and resulting in no impact to the Condensed Consolidated Statement of Comprehensive (Loss) Income. Refer to Note 16 for additional information.
The maturity distribution of debt securities outstanding is summarized in the following tables based upon contractual maturities. Call or prepayment options may cause actual maturities to differ from contractual maturities.
TotalDue in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten years
($ in millions)AmountYieldAmountYieldAmountYieldAmountYieldAmountYield
March 31, 2024
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies$2,057 1.6 %$218 0.9 %$1,112 1.5 %$727 1.9 %$— — %
U.S. States and political subdivisions643 3.2 4 3.2 61 3.0 102 3.6 476 3.2 
Foreign government182 2.4 23 1.8 77 2.5 82 2.5 — — 
Agency mortgage-backed residential (b)14,752 2.6 — — 9 1.9 30 2.5 14,713 2.6 
Mortgage-backed residential219 2.7 — — — — — — 219 2.7 
Agency mortgage-backed commercial (b)3,800 2.4 — — 184 3.9 1,680 2.4 1,936 2.1 
Asset-backed301 1.7 — — 297 1.7 4 3.9 — — 
Corporate debt1,730 2.7 210 2.6 885 2.6 630 2.9 5 6.1 
Total available-for-sale securities$23,684 2.5 $455 1.8 $2,625 2.1 $3,255 2.4 $17,349 2.5 
Amortized cost of available-for-sale securities
$28,114 $465 $2,808 $3,762 $21,079 
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential$984 2.8 %$— — %$— — %$— — %$984 2.8 %
Mortgage-backed residential3,544 2.8 — — — — 11 3.0 3,533 2.8 
Asset-backed retained notes
127 5.5 13 5.5 76 5.4 37 5.5 1 6.8 
Total held-to-maturity securities
$4,655 2.9 $13 5.5 $76 5.4 $48 4.9 $4,518 3.8 
December 31, 2023
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies$2,075 1.6 %$215 0.9 %$1,120 1.5 %$740 1.9 %$— — %
U.S. States and political subdivisions658 3.2 4 3.4 55 2.7 110 3.6 489 3.1 
Foreign government183 2.3 20 1.3 82 2.4 81 2.5 — — 
Agency mortgage-backed residential (b)15,384 2.6 — — 10 1.9 32 2.5 15,342 2.6 
Mortgage-backed residential225 2.7 — — — — — — 225 2.7 
Agency mortgage-backed commercial (b)3,758 2.3 — — 163 3.8 1,641 2.4 1,954 2.1 
Asset-backed332 1.7 — — 327 1.7 4 3.9 1 2.7 
Corporate debt1,800 2.7 210 2.4 915 2.6 671 2.9 4 6.2 
Total available-for-sale securities$24,415 2.5 $449 1.7 $2,672 2.1 $3,279 2.4 $18,015 2.5 
Amortized cost of available-for-sale securities
$28,416 $461 $2,844 $3,746 $21,365 
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential
$999 2.8 %$— — %$— — %$— — %$999 2.8 %
Mortgage-backed residential3,603 2.8 — — — — 12 3.0 3,591 2.8 
Asset-backed retained notes
78 5.6 1 5.6 41 5.6 2 6.0 34 5.6 
Total held-to-maturity securities
$4,680 2.8 $1 5.6 $41 5.6 $14 3.4 $4,624 2.8 
(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.
(b)Fair value includes basis adjustments for securities in closed portfolios with active hedges under the portfolio layer method. This includes a $77 million liability and a $46 million asset for agency mortgage-backed residential securities at March 31, 2024, and December 31, 2023, respectively, and a $32 million liability and $29 million asset for agency mortgage-backed commercial securities at March 31, 2024, and December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 19 for additional information.
The balances of cash equivalents were $386 million and $36 million at March 31, 2024, and December 31, 2023, respectively, and were composed primarily of money-market funds and short-term securities.
The following table presents interest and dividends on investment securities.
Three months ended March 31,
($ in millions)20242023
Taxable interest$245 $217 
Taxable dividends4 3 
Interest and dividends exempt from U.S. federal income tax6 6 
Interest and dividends on investment securities$255 $226 
The following table presents gross gains and losses realized upon the sales of available-for-sale securities, and net gains or losses on equity securities held during the period.
Three months ended March 31,
($ in millions)20242023
Available-for-sale securities
Gross realized gains$1 $5 
Net realized gain on available-for-sale securities1 5 
Net realized gain on equity securities17 5 
Net unrealized gain on equity securities11 64 
Other gain on investments, net$29 $74 
The following table presents the credit quality of our held-to-maturity securities, based on the latest available information as of March 31, 2024, and December 31, 2023. The credit ratings are sourced from nationally recognized statistical rating organizations, which include S&P, Moody’s, and Fitch. The ratings presented are a composite of the ratings sourced from the agencies or, if the ratings cannot be sourced from the agencies, are based on the asset type of the particular security. All our held-to-maturity securities were current in their payment of principal and interest as of both March 31, 2024, and December 31, 2023. We have not recorded any interest income reversals on our held-to-maturity securities during the three months ended March 31, 2024, or 2023.
($ in millions)AAAAAABBBTotal (a)
March 31, 2024
Debt securities
Agency mortgage-backed residential$— $984 $— $— $984 
Mortgage-backed residential3,442 89 13 — 3,544 
Asset-backed retained notes118 4 3 2 127 
Total held-to-maturity securities$3,560 $1,077 $16 $2 $4,655 
December 31, 2023
Debt securities
Agency mortgage-backed residential$— $999 $— $— $999 
Mortgage-backed residential3,497 93 13 — 3,603 
Asset-backed retained notes73 2 2 1 78 
Total held-to-maturity securities$3,570 $1,094 $15 $1 $4,680 
(a)Rating agencies indicate that they base their ratings on many quantitative and qualitative factors, which may include capital adequacy, liquidity, asset quality, business mix, level and quality of earnings, and the current operating, legislative, and regulatory environment. A credit rating is not a recommendation to buy, sell, or hold securities, and the ratings are subject to revision or withdrawal at any time by the assigning rating agency.
The following table summarizes available-for-sale securities in an unrealized loss position, which we evaluated to determine if a credit loss exists requiring the recognition of an allowance for credit losses. For additional information on our methodology, refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. As of March 31, 2024, and December 31, 2023, we did not have the intent to sell the available-for-sale securities with an unrealized loss position and we do not believe it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. We have not recorded any interest income reversals on our available-for-sale securities during the three months ended March 31, 2024, or 2023.
March 31, 2024December 31, 2023
Less than 12 months12 months or longerLess than 12 months12 months or longer
($ in millions)
Fair value
Unrealized loss
Fair value
Unrealized loss
Fair valueUnrealized lossFair valueUnrealized loss
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies$— $— $2,057 $(229)$— $— $2,075 $(209)
U.S. States and political subdivisions112 (1)488 (76)70 — 501 (70)
Foreign government27 (1)130 (9)16 — 134 (8)
Agency mortgage-backed residential (a)123 (2)14,606 (3,077)300 (5)15,015 (2,734)
Mortgage-backed residential— — 219 (45)— — 225 (43)
Agency mortgage-backed commercial (a)167 (5)3,448 (830)153 (4)3,472 (779)
Asset-backed18 — 275 (9)18 — 302 (12)
Corporate debt53 (1)1,558 (149)33 (1)1,607 (145)
Total available-for-sale securities
$500 $(10)$22,781 $(4,424)$590 $(10)$23,331 $(4,000)
(a)Includes basis adjustments for certain securities that are included in closed portfolios with active hedges under the portfolio layer method at March 31, 2024, and December 31, 2023. The basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 19 for additional information.
During the three months ended March 31, 2024, and 2023, 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 March 31, 2024, or December 31, 2023