Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

NOTE 5: SECURITIES

The following tables summarize the Company’s portfolio of debt securities available for sale and equity investments with readily determinable fair values:


		December 31, 2022
(in millions)		Amortized Cost			Gross Unrealized Gain			Gross Unrealized Loss			Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates	$		1,457	$		—	$		160	$		1,297
GSE CMOs			3,600			1			300			3,301
Private Label CMOs			185			6			—			191
Total mortgage-related debt securities	$		5,242	$		7	$		460	$		4,789
Other Debt Securities:
U. S. Treasury obligations	$		1,491	$		—	$		4	$		1,487
GSE debentures			1,749			—			351			1,398
Asset-backed securities (1)			375			—			14			361
Municipal bonds			30			—			—			30
Corporate bonds			913			2			30			885
Foreign notes			20			—			—			20
Capital trust notes			97			5			12			90
Total other debt securities	$		4,675	$		7	$		411	$		4,271
Total debt securities available for sale	$		9,917	$		14	$		871	$		9,060
Equity securities:
Mutual funds			16			—			2			14
Total equity securities	$		16	$		—	$		2	$		14
Total securities (2)	$		9,933	$		14	$		873	$		9,074

(1)

The underlying assets of the asset-backed securities are substantially guaranteed by the U.S. Government.

(2)

Excludes accrued interest receivable of $31 million included in other assets in the Consolidated Statements of Condition.


	December 31, 2021
(in millions)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates		1,102		20		15	$	1,107
GSE CMOs		1,717		11		45		1,683
Total mortgage-related debt securities	$	2,819	$	31	$	60	$	2,790
Other Debt Securities:
U. S. Treasury obligations		45	$	—	$	—	$	45
GSE debentures		1,524		1		45		1,480
Asset-backed securities (1)		479		3		3		479
Municipal bonds		25		—		—		25
Corporate bonds		821		18		1		838
Foreign Notes		25		1		—		26
Capital trust notes		96		8		7		97
Total other debt securities	$	3,015	$	31	$	56	$	2,990
Total other securities available for sale	$	5,834	$	62	$	116	$	5,780
Equity securities:
Mutual funds		16		—		—		16
Total equity securities	$	16	$	—	$	—	$	16
Total securities (2)	$	5,850	$	62	$	116	$	5,796

(1)

The underlying assets of the asset-backed securities are substantially guaranteed by the U.S. Government.

(2)

Excludes accrued interest receivable of $15 million included in other assets in the Consolidated Statements of Condition.

At December 31, 2022, the Company had $762 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2021, the Company had $734 million of FHLB-NY stock, at cost. The Company maintains an investment in FHLB-NY stock partly in conjunction with its membership in the FHLB and partly related to its access to the FHLB funding it utilizes. In addition, at December 31, 2022, the Company had $176 million of Federal Reserve Bank stock, at cost. The Company had no Federal Reserve Bank stock, at December 31, 2021.

The following table summarizes the gross proceeds, gross realized gains, and gross realized losses from the sale of available-for-sale securities during the years-ended:


	December 31,
(in millions)	2022		2021		2020
Gross proceeds	$	228	$	—	$	484
Gross realized gains		—		—		2
Gross realized losses		—		—		1

Net unrealized (loss) gains on equity securities recognized in earnings for the years ended December 31, 2022, 2021, and 2020 were $(2) million, $0 million and $1 million, respectively.

The following table summarizes, by contractual maturity, the amortized cost of securities at December 31, 2022:


		Mortgage- Related Securities			U.S. Government and GSE Obligations			State, County, and Municipal			Other Debt Securities (1)			Fair Value
(dollars in millions)
Available-for-Sale Debt Securities:
Due within one year	$		52	$		1,588	$		2	$		20	$		1,657
Due from one to five years			195			150			—			472			804
Due from five to ten years			277			1,177			18			509			1,656
Due after ten years			4,718			325			10			404			4,943
Total debt securities available for sale	$		5,242	$		3,240	$		30	$		1,405	$		9,060

(1)

Includes corporate bonds, capital trust notes, foreign notes, and asset-backed securities.

The following table presents securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, 2022:


		Less than Twelve Months						Twelve Months or Longer						Total
(in millions)		Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations	$		1,487	$		4	$		—	$		—	$		1,487	$		4
U.S. Government agency and GSE obligations			243			5			1,156			346			1,399			351
GSE certificates			871			46			420			114			1,291			160
GSE CMOs			2,219			36			925			264			3,144			300
Asset-backed securities			61			2			262			12			323			14
Municipal bonds			9			—			7			—			16			—
Corporate bonds			698			27			97			4			795			30
Foreign notes			20			—			—			—			20			—
Capital trust notes			46			2			34			10			80			12
Equity securities			4			—			10			2			14			2
Total temporarily impaired securities	$		5,658	$		122	$		2,911	$		752	$		8,569	$		873

The following table presents securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, 2021:


	Less than Twelve Months				Twelve Months or Longer				Total
(in millions)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations	$	45	$	—	$	—	$	—	$	45	$	—
U.S. Government agency and GSE obligations		317		7		185		8		502		15
GSE certificates		846		28		293		17		1,139		45
GSE CMOs		491		8		926		37		1,417		45
Asset-backed securities		130		1		135		2		265		3
Municipal bonds		—		—		8		—		8		—
Corporate bonds		—		—		99		1		99		1
Foreign notes		5		—		—		—		5		—
Capital trust notes		—		—		37		7		37		7
Equity securities		12		—		—		—		12		—
Total temporarily impaired securities	$	1,846	$	44	$	1,683	$	72	$	3,529	$	116

The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2022 consisted of twenty three agency collateralized mortgage obligations, five capital trusts notes, seven asset-backed securities, two corporate bonds, thirty three US government agency bonds, one hundred thirty three mortgage-backed securities, one mutual fund, and one municipal bond. The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2021 consisted of four agency collateralized mortgage obligations, five capital trusts notes, four asset-backed securities, two corporate bonds, twenty US government agency bonds, twenty one mortgage-backed securities and one municipal bond.

The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Based on an evaluation of available information about past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability, the Company has concluded that it expects to receive all contractual cash flows from each security held in its available-for-sale securities portfolio.

We first assess whether (i) we intend to sell, or (ii) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, any previously recognized allowances are charged off and the security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria are met, we evaluate whether the decline in fair value has resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

None of the unrealized losses identified as of December 31, 2022 or December 31, 2021 relates to the marketability of the securities or the issuers’ ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Management based this conclusion on an analysis of each issuer including a detailed credit assessment of each issuer. The Company does not intend to sell, and it is not more likely than not that the Company will be required to sell the positions before the recovery of their amortized cost basis, which may be at maturity. As such, no allowance for credit losses was recorded with respect to debt securities as of or during the twelve months ended December 31, 2022.