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Debt Securities

9 Months Ended

Sep. 30, 2025

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, 2025
									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			$	6,252					$	—					$	(892)					$	5,360					$	18					$	(63)					$	5,315
Commercial agency			409						—						—						409						—						(8)						401
			$	6,661					$	—					$	(892)					$	5,769					$	18					$	(71)					$	5,716
Debt securities available for sale:
U.S. Treasury securities			$	2,316					$	9					$	(59)					$	2,266																	$	2,266
Federal agency securities			614						5						(9)						610																		610
Obligations of states and political subdivisions			2						—						—						2																		2
Mortgage-backed securities:
Residential agency			19,299						185						(765)						18,719																		18,719
Commercial agency			4,865						29						(152)						4,742																		4,742
Commercial non-agency			92						—						(9)						83																		83
Corporate and other debt securities			462						6						(4)						464																		464
			$	27,650					$	234					$	(998)					$	26,886																	$	26,886

 

			December 31, 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			$	4,663					$	—					$	(743)					$	3,920					$	—					$	(186)					$	3,734
Commercial agency			507						—						—						507						—						(15)						492
			$	5,170					$	—					$	(743)					$	4,427					$	—					$	(201)					$	4,226
Debt securities available for sale:
U.S. Treasury securities			$	2,088					$	2					$	(87)					$	2,003																	$	2,003
Federal agency securities			460						1						(17)						444																		444
Obligations of states and political subdivisions			2						—						—						2																		2
Mortgage-backed securities:
Residential agency			20,482						20						(1,557)						18,945																		18,945
Commercial agency			4,389						1						(300)						4,090																		4,090
Commercial non-agency			92						—						(10)						82																		82
Corporate and other debt securities			670						2						(14)						658																		658
			$	28,183					$	26					$	(1,985)					$	26,224																	$	26,224

_________

(1)Debt securities held to maturity gross unrealized losses recognized in OCI resulted from transfers of securities available for sale.

The Company utilizes interest rate swap agreements to manage interest rate exposure on certain of the Company's fixed-rate prepayable and non-prepayable debt securities available for sale. See Note 9 for additional information.

The Company reclassified debt securities with an amortized cost, excluding items recognized in OCI, of $1.0 billion in each of the first and second quarters of 2025, for a total of $2.0 billion from available for sale to held to maturity. The Company determined it has both the positive intent and ability to hold these debt securities to maturity. The debt 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 $153 million and $74 million in the first and

second quarters, respectively, at the date of transfer and the offsetting OCI components are being amortized into net interest income over the remaining life of the related debt securities as a yield adjustment, resulting in no impact on future net income.

Debt securities with carrying values of $21.0 billion and $20.9 billion at September 30, 2025 and December 31, 2024, 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, 2025, 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			$	6,252					$	5,315
Commercial agency			409						401
			$	6,661					$	5,716
Debt securities available for sale:
Due in one year or less			$	316					$	313
Due after one year through five years			1,926						1,897
Due after five years through ten years			1,079						1,061
Due after ten years			73						71
Mortgage-backed securities:
Residential agency			19,299						18,719
Commercial agency			4,865						4,742
Commercial non-agency			92						83
			$	27,650					$	26,886

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, 2025 and December 31, 2024. For debt securities transferred to held to maturity from available for sale, the analysis in the tables below compares the debt securities' original amortized cost to its current estimated fair value. All debt 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, 2025
			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			$	197					$	(1)					$	5,118					$	(937)					$	5,315					$	(938)
Commercial agency			—						—						401						(8)						401						(8)
			$	197					$	(1)					$	5,519					$	(945)					$	5,716					$	(946)
Debt securities available for sale:
U.S Treasury securities			$	551					$	(7)					$	1,031					$	(52)					$	1,582					$	(59)
Federal agency securities			234						(1)						138						(8)						372						(9)
Mortgage-backed securities:
Residential agency			1,193						(13)						8,144						(752)						9,337						(765)
Commercial agency			—						—						2,430						(152)						2,430						(152)
Commercial non-agency			—						—						84						(9)						84						(9)
Corporate and other debt securities			—						—						182						(4)						182						(4)
			$	1,978					$	(21)					$	12,009					$	(977)					$	13,987					$	(998)

 

			December 31, 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			$	—					$	—					$	3,734					$	(929)					$	3,734					$	(929)
Commercial agency			—						—						492						(15)						492						(15)
			$	—					$	—					$	4,226					$	(944)					$	4,226					$	(944)
Debt securities available for sale:
U.S. Treasury securities			$	612					$	(14)					$	1,033					$	(73)					$	1,645					$	(87)
Federal agency securities			155						(3)						195						(14)						350						(17)
Mortgage-backed securities:
Residential agency			8,012						(203)						9,605						(1,354)						17,617						(1,557)
Commercial agency			1,043						(35)						2,991						(265)						4,034						(300)
Commercial non-agency			—						—						82						(10)						82						(10)
Corporate and other debt securities			59						(1)						397						(13)						456						(14)
			$	9,881					$	(256)					$	14,303					$	(1,729)					$	24,184					$	(1,985)

The number of individual debt security positions in an unrealized loss position in the tables above decreased to 1,405 at September 30, 2025 from 1,722 at December 31, 2024. 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, 2025, 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.

The following table presents gross realized gains and gross realized losses on sales of debt securities available for sale.

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- Definition

The entire disclosure for investments in certain debt and equity securities.

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