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Investment Securities | 12 Months Ended
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Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets. The methodology for estimating credit losses for available for sale debt securities requires us to estimate lifetime credit losses for all available-for-sale debt securities in an unrealized loss position. When estimating a security’s probability of default and the recovery rate, we assess the security’s credit indicators, including credit ratings. If our assessment indicates that an estimated credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the estimated credit loss through the Consolidated Statements of Income in Other loans Provision for credit losses. Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. We had accrued interest on our available-for-sale debt securities totaling $5 million and $12 million as of December 31, 2023 and 2022, respectively, presented as Other assets on the Consolidated Balance Sheets. Investment securities also include equity securities carried at fair value on the Consolidated Balance Sheets with unrealized gains and losses recorded in the Consolidated Statements of Income as Other, net expense. Realized gains and losses are recognized upon disposition of the securities using the specific identification method and recorded in the Consolidated Statements of Income as Other, net expense. Refer to Note 14 for a description of our methodology for determining the fair value of investment securities. The following is a summary of investment securities as of December 31:
|  | 2023 |  | 2022
Description of Securities (Millions) |  | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations |  | $ | 61 |  |  | $ | — |  |  | $ | (6) |  |  | $ | 55 |  |  | $ | 64 |  |  | $ | — |  |  | $ | (10) |  |  | $ | 54 |
U.S. Government agency obligations |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  | 5 |  |  | — |  |  | — |  |  | 5 |
U.S. Government treasury obligations |  | 1,217 |  |  | 1 |  |  | (12) |  |  | 1,206 |  |  | 3,859 |  |  | — |  |  | (73) |  |  | 3,786 |
Mortgage-backed securities (a) |  | 12 |  |  | — |  |  | (1) |  |  | 11 |  |  | 13 |  |  | — |  |  | — |  |  | 13 |
Foreign government bonds and obligations |  | 770 |  |  | — |  |  | — |  |  | 770 |  |  | 633 |  |  | — |  |  | (1) |  |  | 632 |
Other (b) |  | 74 |  |  | — |  |  | — |  |  | 74 |  |  | 47 |  |  | — |  |  | — |  |  | 47 |
Equity securities (c)(d) |  | 60 |  |  | 16 |  |  | (10) |  |  | 66 |  |  | 50 |  |  | — |  |  | (9) |  |  | 41 |
Total |  | $ | 2,198 |  |  | $ | 17 |  |  | $ | (29) |  |  | $ | 2,186 |  |  | $ | 4,671 |  |  | $ | — |  |  | $ | (93) |  |  | $ | 4,578 |
(a)Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. (b)Represents investments in debt securities issued by Community Development Financial Institutions. (c)Equity securities comprise investments in common stock, exchange-traded funds and mutual funds. (d)During the third quarter of 2023, certain equity securities were reclassified from Other assets to Investment securities following the completion of transactions pursuant to which the issuers of the securities became public companies. The investments had a fair value of $24 million with an associated cost basis of $10 million as of December 31, 2023. The gross unrealized gain and loss amounts include net unrealized gains of $37 million that were recognized prior to such transactions. The following table provides information about our available-for-sale debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2023 and 2022:
|  | 2023 |  | 2022
|  | Less than 12 months |  | 12 months or more |  | Less than 12 months |  | 12 months or more
Description of Securities (Millions) |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
State and municipal obligations |  | $ | — |  |  | $ | — |  |  | $ | 33 |  |  | $ | (6) |  |  | $ | 52 |  |  | $ | (10) |  |  | $ | — |  |  | $ | — |
U.S. Government treasury obligations |  | — |  |  | — |  |  | 1,114 |  |  | (12) |  |  | 3,710 |  |  | (72) |  |  | 52 |  |  | (1) |
Mortgage-backed securities |  | — |  |  | — |  |  | 7 |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign government bonds and obligations |  | — |  |  | — |  |  | — |  |  | — |  |  | 549 |  |  | (1) |  |  | — |  |  | — |
Total |  | $ | — |  |  | $ | — |  |  | $ | 1,154 |  |  | $ | (19) |  |  | $ | 4,311 |  |  | $ | (83) |  |  | $ | 52 |  |  | $ | (1) |
The gross unrealized losses on our available-for-sale debt securities are primarily attributable to an increase in the current benchmark interest rate. Overall, for the available-for-sale debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses and (iii) we expect that the contractual principal and interest will be received on the securities. We concluded that there was no credit loss attributable to the securities in an unrealized loss position for the periods presented. The following table summarizes the gross unrealized losses for available-for-sale debt securities by ratio of fair value to amortized cost as of December 31, 2023 and 2022:
|  | Less than 12 months |  | 12 months or more |  | Total
Ratio of Fair Value to Amortized Cost (Dollars in millions) |  | Number of Securities |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Number of Securities |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Number of Securities |  | Estimated Fair Value |  | Gross Unrealized Losses
2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
90%–100% |  | — |  | $ | — |  |  | $ | — |  |  | 69 |  | $ | 1,140 |  |  | $ | (14) |  |  | 69 |  | $ | 1,140 |  |  | $ | (14) |
Less than 90% |  | — |  | — |  |  | — |  |  | 2 |  | 14 |  |  | (5) |  |  | 2 |  | 14 |  |  | (5) |
Total as of December 31, 2023 |  | — |  | $ | — |  |  | $ | — |  |  | 71 |  | $ | 1,154 |  |  | $ | (19) |  |  | 71 |  | $ | 1,154 |  |  | $ | (19) |
2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
90%–100% |  | 74 |  | $ | 4,287 |  |  | $ | (74) |  |  | 3 |  | $ | 52 |  |  | $ | (1) |  |  | 77 |  | $ | 4,339 |  |  | $ | (75) |
Less than 90% |  | 14 |  | 24 |  |  | (9) |  |  | — |  | — |  |  | — |  |  | 14 |  | 24 |  |  | (9) |
Total as of December 31, 2022 |  | 88 |  | $ | 4,311 |  |  | $ | (83) |  |  | 3 |  | $ | 52 |  |  | $ | (1) |  |  | 91 |  | $ | 4,363 |  |  | $ | (84) |
Weighted average yields and contractual maturities for available-for-sale debt securities with stated maturities as of December 31, 2023 were as follows:
(Millions) |  | Due within 1 year |  | Due after 1 year but within 5 years |  | Due after 5 years but within 10 years |  | Due after 10 years |  | Total |
State and municipal obligations (a) |  | $ | — |  |  | $ | 1 |  |  | $ | 20 |  |  | $ | 34 |  |  | $ | 55 |  |
U.S. Government agency obligations (a) |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 4 |  |
U.S. Government treasury obligations |  | 1,010 |  |  | 194 |  |  | 2 |  |  | — |  |  | 1,206 |  |
Mortgage-backed securities (a)(b) |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |  |
Foreign government bonds and obligations |  | 768 |  |  | 2 |  |  | — |  |  | — |  |  | 770 |  |
Other (c) |  | — |  |  | 64 |  |  | 10 |  |  | — |  |  | 74 |  |
Total Estimated Fair Value |  | $ | 1,778 |  |  | $ | 261 |  |  | $ | 32 |  |  | $ | 49 |  |  | $ | 2,120 |  |
Total Cost |  | $ | 1,784 |  |  | $ | 265 |  |  | $ | 33 |  |  | $ | 56 |  |  | $ | 2,138 |  |
Weighted average yield (d) |  | 4.68 | % |  | 3.17 | % |  | 4.76 | % |  | 2.80 | % |  | 4.44 | % |
(a)The expected payments on state and municipal obligations, U.S. Government agency obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations. (b)Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. (c)Represents investments in debt securities issued by Community Development Financial Institutions. (d)Average yields for investment securities have been calculated using the effective yield on the date of purchase. Yields on tax-exempt investment securities have been computed on a tax-equivalent basis using the U.S. federal statutory tax rate of 21 percent.

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