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Debt Securities | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
Securities | NOTE 3. DEBT SECURITIES The amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities held to maturity and debt securities available for sale are as follows:
| September 30, 2024
|  |  | Recognized in OCI (1) |  |  |  | Not recognized in OCI |  |
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Carrying Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
| (In millions)
Debt securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency | $ | 2,718 |  |  | $ | — |  |  | $ | (442) |  |  | $ | 2,276 |  |  | $ | — |  |  | $ | (16) |  |  | $ | 2,260 |
Commercial agency | 512 |  |  | — |  |  | (1) |  |  | 511 |  |  | — |  |  | (12) |  |  | 499 |
| $ | 3,230 |  |  | $ | — |  |  | $ | (443) |  |  | $ | 2,787 |  |  | $ | — |  |  | $ | (28) |  |  | $ | 2,759 |
Debt securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 2,102 |  |  | $ | 13 |  |  | $ | (69) |  |  | $ | 2,046 |  |  |  |  |  |  | $ | 2,046 |
Federal agency securities | 461 |  |  | 6 |  |  | (10) |  |  | 457 |  |  |  |  |  |  | 457 |
Obligations of states and political subdivisions | 2 |  |  | — |  |  | — |  |  | 2 |  |  |  |  |  |  | 2 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency | 21,564 |  |  | 199 |  |  | (1,304) |  |  | 20,459 |  |  |  |  |  |  | 20,459 |
Commercial agency | 5,135 |  |  | 10 |  |  | (223) |  |  | 4,922 |  |  |  |  |  |  | 4,922 |
Commercial non-agency | 92 |  |  | — |  |  | (7) |  |  | 85 |  |  |  |  |  |  | 85 |
Corporate and other debt securities | 734 |  |  | 6 |  |  | (13) |  |  | 727 |  |  |  |  |  |  | 727 |
| $ | 30,090 |  |  | $ | 234 |  |  | $ | (1,626) |  |  | $ | 28,698 |  |  |  |  |  |  | $ | 28,698 |
| December 31, 2023
|  |  | Recognized in OCI (1) |  |  |  | Not recognized in OCI |  |
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Carrying Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
| (In millions)
Debt securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency | $ | 247 |  |  | $ | — |  |  | $ | (8) |  |  | $ | 239 |  |  | $ | — |  |  | $ | (16) |  |  | $ | 223 |
Commercial agency | 516 |  |  | — |  |  | (1) |  |  | 515 |  |  | — |  |  | (22) |  |  | 493 |
| $ | 763 |  |  | $ | — |  |  | $ | (9) |  |  | $ | 754 |  |  | $ | — |  |  | $ | (38) |  |  | $ | 716 |
Debt securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 1,322 |  |  | $ | — |  |  | $ | (99) |  |  | $ | 1,223 |  |  |  |  |  |  | $ | 1,223 |
Federal agency securities | 1,085 |  |  | 4 |  |  | (46) |  |  | 1,043 |  |  |  |  |  |  | 1,043 |
Obligations of states and political subdivisions | 2 |  |  | — |  |  | — |  |  | 2 |  |  |  |  |  |  | 2 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency | 19,450 |  |  | 52 |  |  | (2,130) |  |  | 17,372 |  |  |  |  |  |  | 17,372 |
Commercial agency | 7,807 |  |  | 2 |  |  | (502) |  |  | 7,307 |  |  |  |  |  |  | 7,307 |
Commercial non-agency | 93 |  |  | — |  |  | (10) |  |  | 83 |  |  |  |  |  |  | 83 |
Corporate and other debt securities | 1,105 |  |  | 4 |  |  | (35) |  |  | 1,074 |  |  |  |  |  |  | 1,074 |
| $ | 30,864 |  |  | $ | 62 |  |  | $ | (2,822) |  |  | $ | 28,104 |  |  |  |  |  |  | $ | 28,104 |
_________ (1)Securities held to maturity gross unrealized losses recognized in OCI resulted from transfers of securities available for sale to held to maturity. In the third quarter of 2024, the Company reclassified securities with an amortized cost, excluding items recognized in OCI, of $2.5 billion from available for sale to held to maturity. The Company determined it has both the positive intent and ability to hold these securities to maturity. The securities were transferred at amortized cost, in addition to the amount of any remaining unrealized holding gain or loss reported in AOCI, and represented a non-cash transaction. OCI included net pre-tax unrealized losses of $436 million at the date of transfer and the offsetting OCI components are being amortized into net interest income over the remaining life of the related securities as a yield adjustment, resulting in no impact on future net income. Debt securities with carrying values of $20.8 billion and $24.0 billion at September 30, 2024 and December 31, 2023, respectively, were pledged to secure public funds, trust deposits and other borrowing arrangements. The amortized cost and estimated fair value of debt securities held to maturity and debt securities available for sale at September 30, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized Cost |  | Estimated Fair Value
| (In millions)
Debt securities held to maturity: |  |  |
Mortgage-backed securities: |  |  |
Residential agency | $ | 2,718 |  |  | $ | 2,260 |
Commercial agency | 512 |  |  | 499 |
| $ | 3,230 |  |  | $ | 2,759 |
Debt securities available for sale: |  |  |
Due in one year or less | $ | 411 |  |  | $ | 405 |
Due after one year through five years | 2,023 |  |  | 1,967 |
Due after five years through ten years | 726 |  |  | 731 |
Due after ten years | 139 |  |  | 129 |
Mortgage-backed securities: |  |  |
Residential agency | 21,564 |  |  | 20,459 |
Commercial agency | 5,135 |  |  | 4,922 |
Commercial non-agency | 92 |  |  | 85 |
| $ | 30,090 |  |  | $ | 28,698 |
The following tables present gross unrealized losses and the related estimated fair value of debt securities held to maturity and debt securities available for sale at September 30, 2024 and December 31, 2023. For debt securities transferred to held to maturity from available for sale, the analysis in the tables below compares the securities' original amortized cost to its current estimated fair value. All securities in an unrealized position are segregated between investments that have been in a continuous unrealized loss position for less than twelve months and for twelve months or more.
| September 30, 2024
| Less Than Twelve Months |  | Twelve Months or More |  | Total
| Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
| (In millions)
Debt securities held to maturity: |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential agency | $ | — |  |  | $ | — |  |  | $ | 2,260 |  |  | $ | (458) |  |  | $ | 2,260 |  |  | $ | (458) |
Commercial agency | — |  |  | — |  |  | 499 |  |  | (13) |  |  | 499 |  |  | (13) |
| $ | — |  |  | $ | — |  |  | $ | 2,759 |  |  | $ | (471) |  |  | $ | 2,759 |  |  | $ | (471) |
Debt securities available for sale: |  |  |  |  |  |  |  |  |  |  |
U.S Treasury securities | $ | 92 |  |  | $ | — |  |  | $ | 1,122 |  |  | $ | (69) |  |  | $ | 1,214 |  |  | $ | (69) |
Federal agency securities | — |  |  | — |  |  | 200 |  |  | (10) |  |  | 200 |  |  | (10) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential agency | 1,216 |  |  | (6) |  |  | 12,079 |  |  | (1,298) |  |  | 13,295 |  |  | (1,304) |
Commercial agency | 383 |  |  | (3) |  |  | 3,709 |  |  | (220) |  |  | 4,092 |  |  | (223) |
Commercial non-agency | — |  |  | — |  |  | 84 |  |  | (7) |  |  | 84 |  |  | (7) |
Corporate and other debt securities | 18 |  |  | — |  |  | 444 |  |  | (13) |  |  | 462 |  |  | (13) |
| $ | 1,709 |  |  | $ | (9) |  |  | $ | 17,638 |  |  | $ | (1,617) |  |  | $ | 19,347 |  |  | $ | (1,626) |
| December 31, 2023
| Less Than Twelve Months |  | Twelve Months or More |  | Total
| Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
| (In millions)
Debt securities held to maturity: |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential agency | $ | — |  |  | $ | — |  |  | $ | 223 |  |  | $ | (23) |  |  | $ | 223 |  |  | $ | (23) |
Commercial agency | — |  |  | — |  |  | 493 |  |  | (23) |  |  | 493 |  |  | (23) |
| $ | — |  |  | $ | — |  |  | $ | 716 |  |  | $ | (46) |  |  | $ | 716 |  |  | $ | (46) |
Debt securities available for sale: |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 6 |  |  | $ | — |  |  | $ | 1,201 |  |  | $ | (99) |  |  | $ | 1,207 |  |  | $ | (99) |
Federal agency securities | 237 |  |  | (5) |  |  | 666 |  |  | (41) |  |  | 903 |  |  | (46) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential agency | 241 |  |  | (3) |  |  | 15,144 |  |  | (2,127) |  |  | 15,385 |  |  | (2,130) |
Commercial agency | 612 |  |  | (7) |  |  | 6,583 |  |  | (495) |  |  | 7,195 |  |  | (502) |
Commercial non-agency | — |  |  | — |  |  | 82 |  |  | (10) |  |  | 82 |  |  | (10) |
Corporate and other debt securities | 23 |  |  | — |  |  | 879 |  |  | (35) |  |  | 902 |  |  | (35) |
| $ | 1,119 |  |  | $ | (15) |  |  | $ | 24,555 |  |  | $ | (2,807) |  |  | $ | 25,674 |  |  | $ | (2,822) |
The number of individual debt positions in an unrealized loss position in the tables above decreased to 1,540 at September 30, 2024 from 1,703 at December 31, 2023. The decrease in the total amount of unrealized losses was impacted by changes in market interest rates. In instances where an unrealized loss existed, there was no indication of an adverse change in credit on the underlying positions in the tables above. As it relates to these positions, management believes no individual unrealized loss represented credit impairment as of those dates. At September 30, 2024, 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 bases, which may be at maturity. Gross realized losses on sales of debt securities available for sale for the three and nine months ended September 30, 2024 totaled $92 million and $192 million, respectively, while gross realized gains totaled $14 million for both the three and nine months ended September 30, 2024. Therefore, the Company recognized net realized losses of $78 million and $178 million for the three and nine months ended September 30, 2024, respectively. Gross realized gains and losses on sales of debt securities available for sale were immaterial for three and nine months ended September 30, 2023. The cost of securities sold is based on the specific identification method. As part of the Company's normal process for evaluating impairment, including credit-related impairment, impairment identified by management was immaterial for the three and nine months ended September 30, 2024 and 2023.

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