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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The Bancorp measures certain financial assets and liabilities at fair value in accordance with U.S. GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. For more information regarding the fair value hierarchy, refer to Note 1 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables summarize assets and liabilities measured at fair value on a recurring basis as of:
| Fair Value Measurements Using |
September 30, 2025 ($ in millions) | Level 1 | Level 2 | Level 3 | Total Fair Value
Assets: |  |  |  |
Available-for-sale debt and other securities: |  |  |  |
U.S. Treasury and federal agencies securities | $ | 2,105 |  | — |  | — |  | 2,105 |
Mortgage-backed securities: |  |  |  |
Agency residential mortgage-backed securities | — |  | 7,535 |  | — |  | 7,535 |
Agency commercial mortgage-backed securities | — |  | 20,564 |  | — |  | 20,564 |
Non-agency commercial mortgage-backed securities | — |  | 2,947 |  | — |  | 2,947 |
Asset-backed securities and other debt securities | — |  | 2,442 |  | — |  | 2,442 |
Available-for-sale debt and other securities(a) | 2,105 |  | 33,488 |  | — |  | 35,593 |
Trading debt securities: |  |  |  |
U.S. Treasury and federal agencies securities | 558 |  | 18 |  | — |  | 576 |
Obligations of states and political subdivisions securities | — |  | 58 |  | — |  | 58 |
Agency residential mortgage-backed securities | — |  | 39 |  | — |  | 39 |
Asset-backed securities and other debt securities | — |  | 593 |  | — |  | 593 |
Trading debt securities | 558 |  | 708 |  | — |  | 1,266 |
Equity securities | 270 |  | 17 |  | — |  | 287 |
Residential mortgage loans held for sale | — |  | 565 |  | — |  | 565 |
Residential mortgage loans(b) | — |  | — |  | 107 |  | 107 |
Servicing rights | — |  | — |  | 1,601 |  | 1,601 |
Derivative assets: |  |  |  |
Interest rate contracts | 3 |  | 491 |  | 8 |  | 502 |
Foreign exchange contracts | — |  | 668 |  | — |  | 668 |
Commodity contracts | 164 |  | 503 |  | — |  | 667 |
Derivative assets(c) | 167 |  | 1,662 |  | 8 |  | 1,837 |
Total assets | $ | 3,100 |  | 36,440 |  | 1,716 |  | 41,256 |
Liabilities: |  |  |  |
Derivative liabilities: |  |  |  |
Interest rate contracts | $ | 5 |  | 595 |  | 5 |  | 605 |
Foreign exchange contracts | — |  | 628 |  | — |  | 628 |
Equity contracts | — |  | — |  | 150 |  | 150 |
Commodity contracts | 54 |  | 618 |  | — |  | 672 |
Derivative liabilities(d) | 59 |  | 1,841 |  | 155 |  | 2,055 |
Short positions: |  |  |  |
U.S. Treasury and federal agencies securities | 113 |  | 1 |  | — |  | 114 |
Asset-backed securities and other debt securities | — |  | 276 |  | — |  | 276 |
Equity securities | 29 |  | — |  | — |  | 29 |
Short positions(d) | 142 |  | 277 |  | — |  | 419 |
Total liabilities | $ | 201 |  | 2,118 |  | 155 |  | 2,474 |
(a)Excludes FHLB, FRB and DTCC restricted stock holdings totaling $362, $504 and $2, respectively, at September 30, 2025. (b)Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment. (c)Included in other assets in the Condensed Consolidated Balance Sheets. (d)Included in other liabilities in the Condensed Consolidated Balance Sheets.
| Fair Value Measurements Using |
December 31, 2024 ($ in millions) | Level 1 | Level 2 | Level 3 | Total Fair Value
Assets: |  |  |  |
Available-for-sale debt and other securities: |  |  |  |
U.S. Treasury and federal agencies securities | $ | 4,360 |  | — |  | — |  | 4,360 |
Mortgage-backed securities: |  |  |  |
Agency residential mortgage-backed securities | — |  | 5,681 |  | — |  | 5,681 |
Agency commercial mortgage-backed securities | — |  | 20,832 |  | — |  | 20,832 |
Non-agency commercial mortgage-backed securities | — |  | 4,167 |  | — |  | 4,167 |
Asset-backed securities and other debt securities | — |  | 3,729 |  | — |  | 3,729 |
Available-for-sale debt and other securities(a) | 4,360 |  | 34,409 |  | — |  | 38,769 |
Trading debt securities: |  |  |  |
U.S. Treasury and federal agencies securities | 591 |  | 35 |  | — |  | 626 |
Obligations of states and political subdivisions securities | — |  | 120 |  | — |  | 120 |
Agency residential mortgage-backed securities | — |  | 10 |  | — |  | 10 |
Asset-backed securities and other debt securities | — |  | 429 |  | — |  | 429 |
Trading debt securities | 591 |  | 594 |  | — |  | 1,185 |
Equity securities | 307 |  | 34 |  | — |  | 341 |
Residential mortgage loans held for sale | — |  | 574 |  | — |  | 574 |
Residential mortgage loans(b) | — |  | — |  | 108 |  | 108 |
Servicing rights | — |  | — |  | 1,704 |  | 1,704 |
Derivative assets: |  |  |  |
Interest rate contracts | 7 |  | 721 |  | 2 |  | 730 |
Foreign exchange contracts | — |  | 1,167 |  | — |  | 1,167 |
Commodity contracts | 75 |  | 500 |  | — |  | 575 |
Derivative assets(c) | 82 |  | 2,388 |  | 2 |  | 2,472 |
Total assets | $ | 5,340 |  | 37,999 |  | 1,814 |  | 45,153 |
Liabilities: |  |  |  |
Derivative liabilities: |  |  |  |
Interest rate contracts | $ | — |  | 939 |  | 5 |  | 944 |
Foreign exchange contracts | — |  | 1,120 |  | — |  | 1,120 |
Equity contracts | — |  | — |  | 170 |  | 170 |
Commodity contracts | 57 |  | 507 |  | — |  | 564 |
Derivative liabilities(d) | 57 |  | 2,566 |  | 175 |  | 2,798 |
Short positions: |  |  |  |
U.S. Treasury and federal agencies securities | 139 |  | — |  | — |  | 139 |
Asset-backed securities and other debt securities | — |  | 156 |  | — |  | 156 |
Equity securities | 21 |  | — |  | — |  | 21 |
Short positions(d) | 160 |  | 156 |  | — |  | 316 |
Total liabilities | $ | 217 |  | 2,722 |  | 175 |  | 3,114 |
(a)Excludes FHLB, FRB and DTCC restricted stock holdings totaling $276, $500 and $2, respectively, at December 31, 2024. (b)Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment. (c)Included in other assets in the Condensed Consolidated Balance Sheets. (d)Included in other liabilities in the Condensed Consolidated Balance Sheets. For further information on the valuation methodologies used for significant instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, refer to Note 28 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024. The following tables are a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended September 30, 2025 ($ in millions) | Residential Mortgage Loans | Servicing Rights | Interest Rate Derivatives, Net(a) | Equity Derivatives | Total Fair Value
Balance, beginning of period | $ | 107 |  | 1,629 |  | 2 |  | (145) |  | 1,593 |
Total (losses) gains (realized/unrealized):(b) |  |  |  |  |
Included in earnings | 2 |  | (40) |  | 19 |  | (18) |  | (37) |
Purchases/originations | — |  | 12 |  | — |  | — |  | 12 |
Settlements | (3) |  | — |  | (18) |  | 13 |  | (8) |
Transfers into Level 3(c) | 1 |  | — |  | — |  | — |  | 1 |
Balance, end of period | $ | 107 |  | 1,601 |  | 3 |  | (150) |  | 1,561 |
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2025 | $ | 2 |  | (19) |  | 8 |  | (18) |  | (27) |
(a)Net interest rate derivatives include derivative assets and liabilities of $8 and $5, respectively, as of September 30, 2025. (b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2025. (c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended September 30, 2024 ($ in millions) | Residential Mortgage Loans | Servicing Rights | Interest Rate Derivatives, Net(a) | Equity Derivatives | Total Fair Value
Balance, beginning of period | $ | 109 |  | 1,731 |  | — |  | (164) |  | 1,676 |
Total (losses) gains (realized/unrealized):(b) |  |  |  |  |
Included in earnings | 7 |  | (90) |  | 18 |  | (47) |  | (112) |
Purchases/originations | — |  | 15 |  | — |  | — |  | 15 |
Settlements | (3) |  | — |  | (16) |  | 15 |  | (4) |
Transfers into Level 3(c) | 1 |  | — |  | — |  | — |  | 1 |
Balance, end of period | $ | 114 |  | 1,656 |  | 2 |  | (196) |  | 1,576 |
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2024 | $ | 7 |  | (66) |  | 6 |  | (47) |  | (100) |
(a)Net interest rate derivatives include derivative assets and liabilities of $7 and $5, respectively, as of September 30, 2024. (b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2024. (c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the nine months ended September 30, 2025 ($ in millions) | Residential Mortgage Loans | Servicing Rights | Interest Rate Derivatives, Net(a) | Equity Derivatives | Total Fair Value
Balance, beginning of period | $ | 108 |  | 1,704 |  | (3) |  | (170) |  | 1,639 |
Total (losses) gains (realized/unrealized):(b) |  |  |  |  |
Included in earnings | 5 |  | (139) |  | 47 |  | (37) |  | (124) |
Purchases/originations | — |  | 36 |  | (1) |  | — |  | 35 |
Settlements | (9) |  | — |  | (40) |  | 57 |  | 8 |
Transfers into Level 3(c) | 3 |  | — |  | — |  | — |  | 3 |
Balance, end of period | $ | 107 |  | 1,601 |  | 3 |  | (150) |  | 1,561 |
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2025 | $ | 5 |  | (76) |  | 10 |  | (37) |  | (98) |
(a)Net interest rate derivatives include derivative assets and liabilities of $8 and $5, respectively, as of September 30, 2025. (b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2025. (c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the nine months ended September 30, 2024 ($ in millions) | Residential Mortgage Loans | Servicing Rights | Interest Rate Derivatives, Net(a) | Equity Derivatives | Total Fair Value
Balance, beginning of period | $ | 116 |  | 1,737 |  | — |  | (168) |  | 1,685 |
Total (losses) gains (realized/unrealized):(b) |  |  |  |  |
Included in earnings | 4 |  | (112) |  | 38 |  | (87) |  | (157) |
Purchases/originations | — |  | 36 |  | (1) |  | — |  | 35 |
Sales | — |  | (5) |  | — |  | — |  | (5) |
Settlements | (9) |  | — |  | (35) |  | 59 |  | 15 |
Transfers into Level 3(c) | 3 |  | — |  | — |  | — |  | 3 |
Balance, end of period | $ | 114 |  | 1,656 |  | 2 |  | (196) |  | 1,576 |
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2024 | $ | 4 |  | (44) |  | 7 |  | (87) |  | (120) |
(a)Net interest rate derivatives include derivative assets and liabilities of $7 and $5, respectively, as of September 30, 2024. (b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2024. (c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment. The total losses and gains included in earnings for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were recorded in the Condensed Consolidated Statements of Income as follows:
| For the three months ended September 30, | For the nine months ended September 30,
($ in millions) | 2025 | 2024 | 2025 | 2024
Mortgage banking net revenue | $ | (19) |  | (66) |  | (89) |  | (71) |
Capital markets fees | — |  | 1 |  | 2 |  | 2 |
Other noninterest income | (18) |  | (47) |  | (37) |  | (88) |
Total losses | $ | (37) |  | (112) |  | (124) |  | (157) |
The total losses and gains included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at September 30, 2025 and 2024 were recorded in the Condensed Consolidated Statements of Income as follows:
| For the three months ended September 30, | For the nine months ended September 30,
($ in millions) | 2025 | 2024 | 2025 | 2024
Mortgage banking net revenue | $ | (9) |  | (54) |  | (63) |  | (34) |
Capital markets fees | — |  | 1 |  | 2 |  | 2 |
Other noninterest income | (18) |  | (47) |  | (37) |  | (88) |
Total losses | $ | (27) |  | (100) |  | (98) |  | (120) |
The following tables present information as of September 30, 2025 and 2024 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a recurring basis:
As of September 30, 2025 ($ in millions)
Financial Instrument | Fair Value | Valuation Technique | Significant Unobservable Inputs | Range of Inputs | Weighted-Average |
Residential mortgage loans | $ | 107 |  | Loss rate model | Interest rate risk factor | (52.0) |  | - | 6.4% |  | (10.1) | % | (a)
|  |  | Credit risk factor | — |  | - | 0.7% |  | 0.1 | % | (a)
Servicing rights | 1,601 |  | DCF | Prepayment speed | — |  | - | 100.0% | (Fixed) | 6.9 | % | (b)
|  |  |  |  |  |  | (Adjustable) | 18.9 | % | (b)
|  |  | OAS (bps) | 335 |  | - | 1,827 | (Fixed) | 441 | (b)
|  |  |  |  |  |  | (Adjustable) | 714 | (b)
IRLCs, net | 8 |  | DCF | Loan closing rates | 18.9 |  | - | 96.0% |  | 81.9 | % | (c)
Swap associated with the sale of Visa, Inc. Class B Shares | (150) |  | DCF | Timing of the resolution of the Covered Litigation | Q4 2027 | - | Q1 2029 | Q2 2028 | (d)
(a)Unobservable inputs were weighted by the relative carrying value of the instruments. (b)Unobservable inputs were weighted by the relative unpaid principal balance of the instruments. (c)Unobservable inputs were weighted by the relative notional amount of the instruments. (d)Unobservable inputs were weighted by the probability of the final funding date of the instruments.
As of September 30, 2024 ($ in millions)
Financial Instrument | Fair Value | Valuation Technique | Significant Unobservable Inputs | Range of Inputs | Weighted-Average |
Residential mortgage loans | $ | 114 |  | Loss rate model | Interest rate risk factor | (52.3) |  | - | 4.3 % |  | (9.3) | % | (a)
|  |  | Credit risk factor | — |  | - | 0.5 % |  | 0.1 | % | (a)
Servicing rights | 1,656 |  | DCF | Prepayment speed | — |  | - | 100.0 % | (Fixed) | 6.7 | % | (b)
|  |  |  |  |  |  | (Adjustable) | 22.0 | % | (b)
|  |  | OAS (bps) | 420 | - | 1,833 | (Fixed) | 470 | (b)
|  |  |  |  |  |  | (Adjustable) | 696 | (b)
IRLCs, net | 6 |  | DCF | Loan closing rates | 18.5 |  | - | 96.0 % |  | 78.7 | % | (c)
Swap associated with the sale of Visa, Inc. Class B Shares | (196) |  | DCF | Timing of the resolution of the Covered Litigation | Q4 2026 | - | Q1 2028 | Q2 2027 | (d)
(a)Unobservable inputs were weighted by the relative carrying value of the instruments. (b)Unobservable inputs were weighted by the relative unpaid principal balance of the instruments. (c)Unobservable inputs were weighted by the relative notional amount of the instruments. (d)Unobservable inputs were weighted by the probability of the final funding date of the instruments. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The following tables provide the fair value hierarchy and carrying amount of all assets that were held as of September 30, 2025 and 2024, and for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2025 and 2024, and the related gains and losses from fair value adjustments on assets sold during the period as well as assets still held as of the end of the period.
| Fair Value Measurements Using |  | Total (Losses) Gains
As of September 30, 2025 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | For the three months ended September 30, 2025 | For the nine months ended September 30, 2025
Commercial loans and leases | $ | — |  | — |  | 171 |  | 171 |  | (246) |  | (450) |
Consumer and residential mortgage loans | — |  | — |  | 216 |  | 216 |  | (2) |  | (9) |
OREO | — |  | — |  | 4 |  | 4 |  | 6 |  | 7 |
Bank premises and equipment | — |  | — |  | 1 |  | 1 |  | (1) |  | (1) |
Private equity investments | — |  | 13 |  | — |  | 13 |  | — |  | 4 |
Total | $ | — |  | 13 |  | 392 |  | 405 |  | (243) |  | (449) |
| Fair Value Measurements Using |  | Total (Losses) Gains
As of September 30, 2024 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | For the three months ended September 30, 2024 | For the nine months ended September 30, 2024
Commercial loans held for sale | $ | — |  | — |  | 47 |  | 47 |  | (1) |  | (1) |
Commercial loans and leases | — |  | — |  | 125 |  | 125 |  | (73) |  | (177) |
Consumer and residential mortgage loans | — |  | — |  | 208 |  | 208 |  | (7) |  | (10) |
OREO | — |  | — |  | 6 |  | 6 |  | — |  | (1) |
Bank premises and equipment | — |  | — |  | 9 |  | 9 |  | — |  | — |
Private equity investments | — |  | 3 |  | — |  | 3 |  | 2 |  | 11 |
Total | $ | — |  | 3 |  | 395 |  | 398 |  | (79) |  | (178) |
The following tables present information as of September 30, 2025 and 2024 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a nonrecurring basis:
As of September 30, 2025 ($ in millions)
Financial Instrument | Fair Value | Valuation Technique | Significant Unobservable Inputs | Ranges of Inputs | Weighted-Average
Commercial loans and leases | $ | 171 |  | Appraised value | Collateral value | NM | NM
Consumer and residential mortgage loans | 216 |  | Appraised value | Collateral value | NM | NM
OREO | 4 |  | Appraised value | Appraised value | NM | NM
Bank premises and equipment | 1 |  | Appraised value | Appraised value | NM | NM
Private equity investments | — |  | Comparable company analysis | Market comparable transactions | NM | NM
As of September 30, 2024 ($ in millions)
Financial Instrument | Fair Value | Valuation Technique | Significant Unobservable Inputs | Ranges of Inputs | Weighted-Average
Commercial loans held for sale | $ | 47 |  | Comparable company analysis | Market comparable transactions | NM | NM
Commercial loans and leases | 125 |  | Appraised value | Collateral value | NM | NM
Consumer and residential mortgage loans | 208 |  | Appraised value | Collateral value | NM | NM
OREO | 6 |  | Appraised value | Appraised value | NM | NM
Bank premises and equipment | 9 |  | Appraised value | Appraised value | NM | NM
Private equity investments | — |  | Comparable company analysis | Market comparable transactions | NM | NM
Commercial loans held for sale The Bancorp estimated the fair value of certain commercial loans held for sale during the three and nine months ended September 30, 2024. These valuations were based on appraisals of the underlying collateral or by applying unobservable inputs such as an estimated market discount to the unpaid principal balance of the loans or the appraised value of the assets (Level 3 of the valuation hierarchy). Portfolio loans and leases During the three and nine months ended September 30, 2025 and 2024, the Bancorp recorded nonrecurring adjustments to certain portfolio loans and leases. These valuations were based on appraisals of the underlying collateral or by applying unobservable inputs such as an estimated market discount to the unpaid principal balance of the loans or the appraised value of the assets (Level 3 of the valuation hierarchy). OREO During the three and nine months ended September 30, 2025 and 2024, the Bancorp recorded nonrecurring adjustments to certain commercial and residential real estate properties and branch-related real estate no longer intended to be used for banking purposes classified as OREO and measured at the lower of carrying amount or fair value. These nonrecurring adjustments were primarily due to changes in real estate values of the properties recognized upon the transfer, or subsequent to the transfer, to OREO. For both the three and nine months ended September 30, 2025, these nonrecurring adjustments included $6 million recorded as gains from fair value adjustments upon the sale of certain branch-related real estate no longer intended to be used for banking purposes classified as OREO. The fair value amounts are generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Bank premises and equipment The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. These properties were written down to their lower of cost or market values. At least annually thereafter, the Bancorp will review these properties for market fluctuations. The fair value amounts were generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. Private equity investments The Bancorp accounts for its private equity investments using the measurement alternative to fair value, except for those accounted for under the equity method of accounting. Under the measurement alternative, the Bancorp carries each investment at its cost basis minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Bancorp did not recognize gains and recognized gains of $4 million during the three and nine months ended September 30, 2025, respectively, and recognized gains of $2 million and $11 million during the three and nine months ended September 30, 2024, respectively, resulting from observable price changes. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2025 includes a cumulative $23 million of positive adjustments as a result of observable price changes since January 1, 2018. Because these adjustments are based on observable transactions in inactive markets, they are classified in Level 2 of the fair value hierarchy. For private equity investments which are accounted for using the measurement alternative to fair value, the Bancorp qualitatively evaluates each investment quarterly to determine if impairment may exist. If necessary, the Bancorp then measures impairment by estimating the value of its investment and comparing that to the investment’s carrying value, whether or not the Bancorp considers the impairment to be temporary. These valuations are typically developed using a DCF method, but other methods may be used if more appropriate for the circumstances. These valuations are based on unobservable inputs and therefore are classified in Level 3 of the fair value hierarchy. The Bancorp did not recognize impairment charges and recognized an immaterial amount of impairment charges on its private equity investments for the three and nine months ended September 30, 2025, respectively, and did not recognize impairment charges for both the three and nine months ended September 30, 2024. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2025 includes a cumulative $15 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018. Fair Value Option The Bancorp elected to measure certain residential mortgage loans held for sale under the fair value option as allowed under U.S. GAAP. Electing to measure residential mortgage loans held for sale at fair value reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Management’s intent to sell residential mortgage loans classified as held for sale may change over time due to such factors as changes in the overall liquidity in markets or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified to loans held for investment and maintained in the Bancorp’s loan portfolio. In such cases, the loans will continue to be measured at fair value. Fair value changes recognized in earnings for residential mortgage loans held at September 30, 2025 and 2024 for which the fair value option was elected included losses of $24 million and gains of $2 million, respectively. These changes are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income. Valuation adjustments related to instrument-specific credit risk for residential mortgage loans measured at fair value negatively impacted the fair value of those loans by an immaterial amount at both September 30, 2025 and December 31, 2024. Interest on loans measured at fair value is accrued as it is earned using the effective interest method and is reported as interest income in the Condensed Consolidated Statements of Income. The following table summarizes the fair value and the unpaid principal balance for residential mortgage loans measured at fair value as of:
September 30, 2025 ($ in millions) | Aggregate Fair Value | Aggregate Unpaid Principal Balance
Residential mortgage loans measured at fair value | $ | 672 |  | 668 |
Past due loans of 30-89 days | 2 |  | 2 |
Past due loans of 90 days or more | 1 |  | 1 |
Nonaccrual loans | 3 |  | 3 |
December 31, 2024 |  |
Residential mortgage loans measured at fair value | $ | 682 |  | 693 |
Past due loans of 30-89 days | 1 |  | 1 |
Past due loans of 90 days or more | 1 |  | 1 |
Nonaccrual loans | 2 |  | 2 |
Fair Value of Certain Financial Instruments The following tables summarize the carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments measured at fair value on a recurring basis:
| Net Carrying Amount | Fair Value Measurements Using | Total Fair Value
As of September 30, 2025 ($ in millions) | Level 1 | Level 2 | Level 3
Financial assets: |  |  |  |  |
Cash and due from banks | $ | 2,901 |  | 2,901 |  | — |  | — |  | 2,901 |
Other short-term investments | 17,215 |  | 17,215 |  | — |  | — |  | 17,215 |
Other securities | 868 |  | — |  | 868 |  | — |  | 868 |
Held-to-maturity securities | 11,498 |  | 2,436 |  | 9,068 |  | 2 |  | 11,506 |
Loans and leases held for sale | 11 |  | — |  | — |  | 11 |  | 11 |
Portfolio loans and leases: |  |  |  |  |
Commercial loans and leases | 73,241 |  | — |  | — |  | 74,325 |  | 74,325 |
Consumer and residential mortgage loans | 47,517 |  | — |  | — |  | 47,142 |  | 47,142 |
Total portfolio loans and leases, net | $ | 120,758 |  | — |  | — |  | 121,467 |  | 121,467 |
Financial liabilities: |  |  |  |  |
Deposits | $ | 166,569 |  | — |  | 166,682 |  | — |  | 166,682 |
Federal funds purchased | 183 |  | 183 |  | — |  | — |  | 183 |
Other short-term borrowings | 5,077 |  | — |  | 5,079 |  | — |  | 5,079 |
Long-term debt | 13,660 |  | 8,502 |  | 5,590 |  | — |  | 14,092 |
| Net Carrying Amount | Fair Value Measurements Using | Total Fair Value
As of December 31, 2024 ($ in millions) | Level 1 | Level 2 | Level 3
Financial assets: |  |  |  |  |
Cash and due from banks | $ | 3,014 |  | 3,014 |  | — |  | — |  | 3,014 |
Other short-term investments | 17,120 |  | 17,120 |  | — |  | — |  | 17,120 |
Other securities | 778 |  | — |  | 778 |  | — |  | 778 |
Held-to-maturity securities | 11,278 |  | 2,344 |  | 8,619 |  | 2 |  | 10,965 |
Loans and leases held for sale | 66 |  | — |  | — |  | 66 |  | 66 |
Portfolio loans and leases: |  |  |  |  |
Commercial loans and leases | 72,139 |  | — |  | — |  | 72,319 |  | 72,319 |
Consumer and residential mortgage loans | 45,192 |  | — |  | — |  | 42,155 |  | 42,155 |
Total portfolio loans and leases, net | $ | 117,331 |  | — |  | — |  | 114,474 |  | 114,474 |
Financial liabilities: |  |  |  |  |
Deposits | $ | 167,252 |  | — |  | 167,353 |  | — |  | 167,353 |
Federal funds purchased | 204 |  | 204 |  | — |  | — |  | 204 |
Other short-term borrowings | 4,450 |  | — |  | 4,459 |  | — |  | 4,459 |
Long-term debt | 14,440 |  | 3,753 |  | 10,835 |  | — |  | 14,588 |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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