Equity Securities (Tables)

9 Months Ended

Sep. 30, 2022

Table 6.1 provides a summary of our equity securities by business purpose and accounting method.

Table 6.1: Equity Securities


(in millions)	Sep 30, 2022		Dec 31, 2021
Held for trading at fair value:
Marketable equity securities (1)	$	14,791	27,476
Nonmarketable equity securities (2)(3)	8,320		—
Total equity securities held for trading	23,111		27,476
Not held for trading:
Fair value:
Marketable equity securities	1,526		2,578
Nonmarketable equity securities (2)	61		9,044
Total equity securities not held for trading at fair value	1,587		11,622
Equity method:
Private equity	2,790		3,077
Tax-advantaged renewable energy	5,258		4,740
New market tax credit and other	305		379
Total equity method	8,353		8,196
Other methods:
Low-income housing tax credit investments (LIHTC)	12,172		12,314
Private equity (4)	10,036		9,694
Federal Reserve Bank stock and other at cost (5)	4,301		3,584
Total equity securities not held for trading	36,449		45,410
Total equity securities	$	59,560	72,886

(1) Represents securities held as part of our customer accommodation trading activities. For additional information on these activities, see Note 2 (Trading Activities).

(2) In first quarter 2022, we prospectively reclassified certain equity securities and related economic hedge derivatives from “not held for trading activities” to “held for trading activities” to better reflect the business activity of those financial instruments. For additional information on Trading Activities, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

(3) Represents securities economically hedged with equity derivatives.

(4) Represents nonmarketable equity securities accounted for under the measurement alternative, which were predominantly securities associated with our affiliated venture capital business.

(5) Substantially all relates to investments in Federal Reserve Bank stock at both September 30, 2022, and December 31, 2021.

Net Gains (Losses) from Equity Securities Not Held for Trading

Table 6.2 provides a summary of the net gains and losses from equity securities not held for trading, which excludes equity method adjustments for our share of the investee’s earnings or losses that are recognized in other noninterest income. Gains and losses for securities held for trading are reported in net gains from trading and securities.

Table 6.2: Net Gains (Losses) from Equity Securities Not Held for Trading



	Quarter ended September 30,			Nine months ended September 30,
(in millions)	2022		2021	2022		2021
Net gains (losses) from equity securities carried at fair value:
Marketable equity securities	$	(22)	(157)	$	(250)	(23)
Nonmarketable equity securities (1)	(35)		(522)	(73)		13
Total equity securities carried at fair value	(57)		(679)	(323)		(10)
Net gains (losses) from nonmarketable equity securities not carried at fair value (2):
Impairment write-downs	(389)		(23)	(1,403)		(80)
Net unrealized gains (3)	82		816	916		3,078
Net realized gains from sale	330		191	737		742

Total nonmarketable equity securities not carried at fair value	23		984	250		3,740
Net gains (losses) from economic hedge derivatives (1)	—		564	—		227
Total net gains (losses) from equity securities not held for trading	$	(34)	869	$	(73)	3,957

(1)In first quarter 2022, we prospectively reclassified certain equity securities and related economic hedge derivatives from “not held for trading activities” to “held for trading activities” to better reflect the business activity of those financial instruments. For additional information on Trading Activities, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

(2)Includes amounts related to private equity and venture capital investments in consolidated portfolio companies, which are not reported in equity securities on our consolidated balance sheet.

(3)Includes unrealized gains (losses) due to observable price changes from equity securities accounted for under the measurement alternative.

Net Gains (Losses) from Measurement Alternative Equity Securities

Table 6.3 provides additional information about the impairment write-downs and observable price changes from nonmarketable equity securities accounted for under the measurement alternative. Gains and losses related to these adjustments are also included in Table 6.2.

Table 6.3: Net Gains (Losses) from Measurement Alternative Equity Securities



	Quarter ended September 30,				Nine months ended September 30,
(in millions)	2022		2021		2022		2021
Net gains (losses) recognized in earnings during the period:
Gross unrealized gains from observable price changes	$	82	816		$	916	3,078

Impairment write-downs	(270)		(19)		(1,214)		(69)
Net realized gains from sale	12		1		90		196
Total net gains (losses) recognized during the period	$	(176)	$	798	$	(208)	3,205

Measurement Alternative Cumulative Gains (Losses)

Table 6.4 presents cumulative carrying value adjustments to nonmarketable equity securities accounted for under the measurement alternative that were still held at the end of each reporting period presented.

Table 6.4: Measurement Alternative Cumulative Gains (Losses)



(in millions)	Sep 30, 2022		Dec 31, 2021

Cumulative gains (losses):
Gross unrealized gains from observable price changes	$	7,075	6,278
Gross unrealized losses from observable price changes	(1)		(3)
Impairment write-downs	(1,922)		(821)