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Investment Securities | 12 Months Ended
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Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT S ECURITIES With the adoption of the CECL standard on January 1, 2020, credit losses on investment securities are required to be recognized through an allowance, instead of as a direct write-down to the amortized cost basis of the security. The amortized cost basis of investment securities for which impairment had previously been recorded did not change upon adoption. We maintain the allowance for investment securities at levels that we believe to be appropriate as of the balance sheet date to absorb expected credit losses on our portfolio. As of December 31, 2020, the allowance for investment securities was $82 million and primarily related to non-agency commercial mortgage-backed securities in the available for sale portfolio and other debt securities in the held to maturity portfolio. The provision for credit losses on investment securities totaled $80 million for the year ended December 31, 2020. In the first quarter of 2020, upon the adoption of ASU 2019-04, we elected to transfer debt securities with an amortized cost of $16.2 billion and a fair value of $16.5 billion from the held to maturity to the available for sale portfolio. During the second quarter of 2020, pursuant to the guidance in ASU 2020-04, we elected to transfer debt securities with an amortized cost of $49 million and a fair value of $48 million from the held to maturity to the available for sale portfolio. See Note 1 Accounting Policies for additional information related to the adoption of the CECL standard, including the methodologies used to determine the allowance for investment securities, and the adoption of ASU 2019-04 and ASU 2020-04. The following table summarizes our available for sale and held to maturity portfolios by major security type: Table 41: Investment Securities Summary
|  | December 31, 2020 (a) |  |  | December 31, 2019
In millions |  | Amortized Cost (b) |  | Unrealized |  | Fair Value |  |  | Amortized Cost |  | Unrealized |  | Fair Value
Gains |  | Losses |  |  |  | Gains |  | Losses |
Securities Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 19,821 |  |  | $ | 903 |  |  | $ | (13) |  |  | $ | 20,711 |  |  |  | $ | 16,150 |  |  | $ | 382 |  |  | $ | (16) |  |  | $ | 16,516 |
Residential mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  | 47,355 |  |  | 1,566 |  |  | (10) |  |  | 48,911 |  |  |  | 35,847 |  |  | 517 |  |  | (43) |  |  | 36,321 |
Non-agency |  | 1,272 |  |  | 243 |  |  | (14) |  |  | 1,501 |  |  |  | 1,515 |  |  | 302 |  |  | (3) |  |  | 1,814 |
Commercial mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  | 2,571 |  |  | 119 |  |  | (2) |  |  | 2,688 |  |  |  | 3,094 |  |  | 42 |  |  | (18) |  |  | 3,118 |
Non-agency |  | 3,678 |  |  | 78 |  |  | (67) |  |  | 3,689 |  |  |  | 3,352 |  |  | 29 |  |  | (9) |  |  | 3,372 |
Asset-backed |  | 5,060 |  |  | 100 |  |  | (10) |  |  | 5,150 |  |  |  | 5,044 |  |  | 78 |  |  | (8) |  |  | 5,114 |
Other |  | 4,415 |  |  | 293 |  |  |  |  | 4,708 |  |  |  | 2,788 |  |  | 121 |  |  | (1) |  |  | 2,908 |
Total securities available for sale (b) |  | $ | 84,172 |  |  | $ | 3,302 |  |  | $ | (116) |  |  | $ | 87,358 |  |  |  | $ | 67,790 |  |  | $ | 1,471 |  |  | $ | (98) |  |  | $ | 69,163 |
Securities Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 795 |  |  | $ | 125 |  |  |  |  | $ | 920 |  |  |  | $ | 776 |  |  | $ | 56 |  |  |  |  | $ | 832 |
Residential mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  |  |  |  |  |  |  |  |  | 14,419 |  |  | 270 |  |  | $ | (26) |  |  | 14,663 |
Non-agency |  |  |  |  |  |  |  |  |  |  | 133 |  |  | 7 |  |  |  |  | 140 |
Commercial mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  |  |  |  |  |  |  |  |  | 59 |  |  | 1 |  |  |  |  | 60 |
Non-agency |  |  |  |  |  |  |  |  |  |  | 430 |  |  | 4 |  |  |  |  | 434 |
Asset-backed |  |  |  |  |  |  |  |  |  |  | 52 |  |  |  |  |  |  | 52 |
Other |  | 646 |  |  | 42 |  |  | $ | (3) |  |  | 685 |  |  |  | 1,792 |  |  | 85 |  |  | (14) |  |  | 1,863 |
Total securities held to maturity (b) (c) |  | $ | 1,441 |  |  | $ | 167 |  |  | $ | (3) |  |  | $ | 1,605 |  |  |  | $ | 17,661 |  |  | $ | 423 |  |  | $ | (40) |  |  | $ | 18,044 |
(a) The accrued interest associated with our available for sale and held to maturity portfolios totaled $238 million and $5 million at December 31, 2020, respectively. These amounts are included in Other assets on the Consolidated Balance Sheet. (b) Amortized cost is presented net of allowance of $79 million for securities available for sale and $3 million for securities held to maturity at December 31, 2020 in accordance with the CECL accounting standard. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies for additional detail on the CECL accounting standard. (c) Credit ratings represent a primary credit quality indicator used to monitor and manage credit risk. As of December 31, 2020, 85% of our securities held to maturity were rated AAA/AA. The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Securities available for sale are carried at fair value with net unrealized gains and losses included in Shareholders’ equity as AOCI, unless credit related. Net unrealized gains and losses are determined by taking the difference between the fair value of a security and its amortized cost, net of any allowance. Securities held to maturity are carried at amortized cost less any allowance. Investment securities at December 31, 2020 included $0.2 billion of net unsettled purchases which represent non-cash investing activity, and accordingly, are not reflected on the Consolidated Statement of Cash Flows. The comparable amount for December 31, 2019 was $0.5 billion. Table 42 presents the gross unrealized losses and fair value of securities available for sale that do not have an associated allowance for investment securities as of December 31, 2020. These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis. All securities included in the table have been evaluated to determine if a credit loss exists. As part of that assessment, as of December 31, 2020, we concluded that we do not intend to sell and believe we will not be required to sell these securities prior to recovery of the amortized cost basis. Table 42: Gross Unrealized Loss and Fair Value of Securities Available for Sale Without an Allowance for Credit Losses
|  | Unrealized loss position less than 12 months |  | Unrealized loss position 12 months or more |  | Total
In millions |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | (13) |  |  | $ | 603 |  |  |  |  |  |  | $ | (13) |  |  | $ | 603 |
Residential mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |
Agency |  | (8) |  |  | 3,152 |  |  | $ | (2) |  |  | $ | 82 |  |  | (10) |  |  | 3,234 |
Non-agency |  | (7) |  |  | 119 |  |  | (7) |  |  | 73 |  |  | (14) |  |  | 192 |
Commercial mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  |  |  |  | (2) |  |  | 149 |  |  | (2) |  |  | 149 |
Non-agency |  | (13) |  |  | 972 |  |  | (7) |  |  | 714 |  |  | (20) |  |  | 1,686 |
Asset-backed |  | (1) |  |  | 339 |  |  | (9) |  |  | 706 |  |  | (10) |  |  | 1,045 |
Total securities available for sale |  | $ | (42) |  |  | $ | 5,185 |  |  | $ | (27) |  |  | $ | 1,724 |  |  | $ | (69) |  |  | $ | 6,909 |
Table 43 presents the gross unrealized losses and fair value of debt securities at December 31, 2019, prior to the adoption of the CECL standard. These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis. Table 43: Gross Unrealized Loss and Fair Value of Debt Securities
|  | Unrealized loss position less than 12 months |  | Unrealized loss position 12 months or more |  | Total |
In millions |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |
Securities Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | (14) |  |  | $ | 2,451 |  |  | $ | (2) |  |  | $ | 607 |  |  | $ | (16) |  |  | $ | 3,058 |  |
Residential mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  | (6) |  |  | 2,832 |  |  | (37) |  |  | 4,659 |  |  | (43) |  |  | 7,491 |  |
Non-agency |  |  |  |  |  | (3) |  |  | 102 |  |  | (3) |  |  | 102 |  |
Commercial mortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  | (6) |  |  | 852 |  |  | (12) |  |  | 953 |  |  | (18) |  |  | 1,805 |  |
Non-agency |  | (4) |  |  | 1,106 |  |  | (5) |  |  | 230 |  |  | (9) |  |  | 1,336 |  |
Asset-backed |  | (3) |  |  | 660 |  |  | (5) |  |  | 561 |  |  | (8) |  |  | 1,221 |  |
Other |  |  |  |  |  | (1) |  |  | 403 |  |  | (1) |  |  | 403 |  |
Total securities available for sale |  | $ | (33) |  |  | $ | 7,901 |  |  | $ | (65) |  |  | $ | 7,515 |  |  | $ | (98) |  |  | $ | 15,416 |  |
Securities Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed - Agency |  |  |  |  |  | $ | (26) |  |  | $ | 2,960 |  |  | $ | (26) |  |  | $ | 2,960 |  |
Other |  | $ | (1) |  |  | $ | 22 |  |  | (13) |  |  | 105 |  |  | (14) |  |  | 127 |  |
Total securities held to maturity |  | $ | (1) |  |  | $ | 22 |  |  | $ | (39) |  |  | $ | 3,065 |  |  | $ | (40) |  |  | $ | 3,087 |  |
Information relating to gross realized securities gains and losses from the sales of securities is set forth in the following table: Table 44: Gains (Losses) on Sales of Securities Available for Sale
Year ended December 31 In millions | Gross Gains |  | Gross Losses |  | Net Gains |  | Tax Expense |
2020 | $ | 307 |  |  | $ | (2) |  |  | $ | 305 |  |  | $ | 64 |  |
2019 | $ | 69 |  |  | $ | (21) |  |  | $ | 48 |  |  | $ | 10 |  |
2018 | $ | 57 |  |  | $ | (57) |  |  |  |  |  |
The following table presents, by remaining contractual maturity, the amortized cost, fair value and weighted-average yield of debt securities at December 31, 2020: Table 45: Contractual Maturity of Debt Securities
December 31, 2020 |  | 1 Year or Less |  | After 1 Year through 5 Years |  | After 5 Years through 10 Years |  | After 10 Years |  | Total
Dollars in millions |  |  |  |  |
Securities Available for Sale |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 1,149 |  |  | $ | 11,973 |  |  | $ | 5,418 |  |  | $ | 1,281 |  |  | $ | 19,821 |
Residential mortgage-backed |  |  |  |  |  |  |  |  |  |
Agency |  | 1 |  |  | 205 |  |  | 2,384 |  |  | 44,765 |  |  | 47,355 |
Non-agency |  |  |  |  |  |  |  | 1,272 |  |  | 1,272 |
Commercial mortgage-backed |  |  |  |  |  |  |  |  |  |
Agency |  | 13 |  |  | 563 |  |  | 679 |  |  | 1,316 |  |  | 2,571 |
Non-agency |  |  |  | 83 |  |  | 236 |  |  | 3,359 |  |  | 3,678 |
Asset-backed |  | 67 |  |  | 2,375 |  |  | 1,029 |  |  | 1,589 |  |  | 5,060 |
Other |  | 788 |  |  | 1,502 |  |  | 1,218 |  |  | 907 |  |  | 4,415 |
Total securities available for sale at amortized cost |  | $ | 2,018 |  |  | $ | 16,701 |  |  | $ | 10,964 |  |  | $ | 54,489 |  |  | $ | 84,172 |
Fair value |  | $ | 2,038 |  |  | $ | 17,283 |  |  | $ | 11,443 |  |  | $ | 56,594 |  |  | $ | 87,358 |
Weighted-average yield, GAAP basis (a) |  | 2.20 | % |  | 1.81 | % |  | 1.74 | % |  | 2.80 | % |  | 2.45 | %
Securities Held to Maturity |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  |  |  | $ | 199 |  |  | $ | 312 |  |  | $ | 284 |  |  | $ | 795 |
Other |  | $ | 34 |  |  | 422 |  |  | 109 |  |  | 81 |  |  | 646 |
Total securities held to maturity at amortized cost |  | $ | 34 |  |  | $ | 621 |  |  | $ | 421 |  |  | $ | 365 |  |  | $ | 1,441 |
Fair value |  | $ | 35 |  |  | $ | 659 |  |  | $ | 507 |  |  | $ | 404 |  |  | $ | 1,605 |
Weighted-average yield, GAAP basis (a) |  | 3.75 | % |  | 3.26 | % |  | 3.93 | % |  | 2.48 | % |  | 3.29 | %
(a) Weighted-average yields are based on amortized cost with effective yields weighted for the contractual maturity of each security. Actual maturities and yields may differ as certain securities may be prepaid. At December 31, 2020, there were no securities of a single issuer, other than FNMA and FHLMC, that exceeded 10% of total shareholders’ equity. The FNMA and FHLMC investments had a total amortized cost of $32.9 billion and $14.7 billion and fair value of $34.2 billion and $14.9 billion, respectively. The following table presents the fair value of securities that have been either pledged to or accepted from others to collateralize outstanding borrowings: Table 46: Fair Value of Securities Pledged and Accepted as Collateral
In millions | December 31 2020 |  | December 31 2019
Pledged to others | $ | 22,841 |  |  | $ | 14,609 |
Accepted from others: |  |  |
Permitted by contract or custom to sell or repledge (a) | $ | 683 |  |  | $ | 2,349 |
Permitted amount repledged to others | $ | 683 |  |  | $ | 360 |
(a)Balances at December 31, 2019 include $2.0 billion in fair value of securities accepted from others to collateralize short-term investments in resale agreements that were not repledged. The securities pledged to others include positions held in our portfolio of investment securities, trading securities and securities accepted as collateral from others that we are permitted by contract or custom to sell or repledge, and were used to secure public and trust deposits, repurchase agreements and for other purposes.

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- Definition This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. + References No definition available. + Details
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- References No definition available. + Details
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