Debt Securities

12 Months Ended

Dec. 31, 2022

Debt Securities, Available-for-Sale [Abstract]

NOTE 3. Debt Securities:

Investments in debt securities, classified as available-for-sale, are as follows:


	Amortized		Gross unrealized					Estimated
(in millions)	cost		gains		losses			fair value
December 31, 2022
U.S. Treasury bonds	$	309	$	1	$	(7	)	$	303
Municipal bonds		1,671		3		(195	)		1,479
Foreign government bonds		208		—		(14	)		194
Governmental agency bonds		248		—		(19	)		229
Governmental agency mortgage-backed securities		5,253		1		(653	)		4,601
U.S. corporate debt securities		1,004		2		(85	)		921
Foreign corporate debt securities		477		2		(36	)		443
	$	9,170	$	9	$	(1,009	)	$	8,170
December 31, 2021
U.S. Treasury bonds	$	123	$	1	$	(1	)	$	123
Municipal bonds		1,607		59		(17	)		1,649
Foreign government bonds		228		2		(3	)		227
Governmental agency bonds		175		3		(1	)		177
Governmental agency mortgage-backed securities		5,620		34		(47	)		5,607
U.S. corporate debt securities		1,071		19		(9	)		1,081
Foreign corporate debt securities		493		9		(4	)		498
	$	9,317	$	127	$	(82	)	$	9,362

Sales of debt securities resulted in realized gains of $5 million, $29 million and $18 million, realized losses of $142 million, $9 million and $3 million, and proceeds of $1.8 billion, $1.1 billion and $759 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Investments in debt securities in an unrealized loss position, based on length of time, are as follows:


	Less than 12 months					12 months or longer					Total
(in millions)	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
December 31, 2022
U.S. Treasury bonds	$	108	$	(1	)	$	50	$	(6	)	$	158	$	(7	)
Municipal bonds		813		(56	)		540		(139	)		1,353		(195	)
Foreign government bonds		142		(6	)		46		(8	)		188		(14	)
Governmental agency bonds		173		(8	)		56		(11	)		229		(19	)
Governmental agency mortgage-backed securities		1,860		(141	)		2,627		(512	)		4,487		(653	)
U.S. corporate debt securities		528		(38	)		325		(47	)		853		(85	)
Foreign corporate debt securities		241		(17	)		137		(19	)		378		(36	)
	$	3,865	$	(267	)	$	3,781	$	(742	)	$	7,646	$	(1,009	)
December 31, 2021
U.S. Treasury bonds	$	76	$	(1	)	$	—	$	—		$	76	$	(1	)
Municipal bonds		684		(17	)		—		—			684		(17	)
Foreign government bonds		103		(1	)		33		(2	)		136		(3	)
Governmental agency bonds		73		(1	)		—		—			73		(1	)
Governmental agency mortgage-backed securities		4,036		(47	)		—		—			4,036		(47	)
U.S. corporate debt securities		533		(9	)		—		—			533		(9	)
Foreign corporate debt securities		234		(4	)		—		—			234		(4	)
	$	5,739	$	(80	)	$	33	$	(2	)	$	5,772	$	(82	)

Based on the Company’s review of its debt securities in an unrealized loss position it determined that the losses were due to non-credit factors and, therefore, it does not consider these securities to be credit impaired at December 31, 2022. As of December 31, 2022, the Company did not intend to sell any debt securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell any debt securities before recovery of their amortized cost basis.

In determining credit losses on its debt securities in an unrealized loss position, the Company considers certain factors that may include, among others, severity of the unrealized loss, security type, industry sector, credit rating, yield to maturity, profitability and stock performance.

Investments in debt securities at December 31, 2022, by contractual maturities, are as follows:


(in millions)	Due in one year or less		Due after one through five years		Due after five through ten years		Due after ten years		Total
U.S. Treasury bonds
Amortized cost	$	143	$	141	$	6	$	19	$	309
Estimated fair value	$	143	$	137	$	5	$	18	$	303
Municipal bonds
Amortized cost		21		288		758		604		1,671
Estimated fair value		21		268		669		521		1,479
Foreign government bonds
Amortized cost		36		95		71		6		208
Estimated fair value		36		93		60		5		194
Governmental agency bonds
Amortized cost		26		157		7		58		248
Estimated fair value		25		151		6		47		229
U.S. corporate debt securities
Amortized cost		55		687		199		63		1,004
Estimated fair value		54		629		186		52		921
Foreign corporate debt securities
Amortized cost		20		300		116		41		477
Estimated fair value		20		280		107		36		443
Total debt securities, excluding mortgage-backed securities
Amortized cost	$	301	$	1,668	$	1,157	$	791	$	3,917
Estimated fair value	$	299	$	1,558	$	1,033	$	679	$	3,569
Total mortgage-backed securities
Amortized cost										5,253
Estimated fair value										4,601
Total debt securities
Amortized cost									$	9,170
Estimated fair value									$	8,170

Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties.

The composition of the debt securities portfolio at December 31, 2022, by credit rating, is as follows:


	A- or higher				BBB+ to BBB-				Non-Investment Grade				Total
(dollars in millions)	Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value
U.S. Treasury bonds	$	303		100.0	$	—		—	$	—		—	$	303
Municipal bonds		1,432		96.8		47		3.2		—		—		1,479
Foreign government bonds		190		98.0		2		1.0		2		1.0		194
Governmental agency bonds		229		100.0		—		—		—		—		229
Governmental agency mortgage- backed securities		4,601		100.0		—		—		—		—		4,601
U.S. corporate debt securities		429		46.6		362		39.3		130		14.1		921
Foreign corporate debt securities		193		43.6		211		47.6		39		8.8		443
	$	7,377		90.3	$	622		7.6	$	171		2.1	$	8,170

Included in debt securities at December 31, 2022, were bank loans totaling $126 million, of which $121 million were non-investment grade; high yield corporate debt securities totaling $44 million, all of which were non-investment grade; and emerging market debt securities totaling $54 million, of which $6 million were non-investment grade.

The composition of the debt securities portfolio in an unrealized loss position at December 31, 2022, by credit rating, is as follows:


	A- or higher				BBB+ to BBB-				Non-Investment Grade				Total
(dollars in millions)	Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value
U.S. Treasury bonds	$	158		100.0	$	—		—	$	—		—	$	158
Municipal bonds		1,315		97.2		38		2.8		—		—		1,353
Foreign government bonds		184		97.9		1		0.5		3		1.6		188
Governmental agency bonds		229		100.0		—		—		—		—		229
Governmental agency mortgage- backed securities		4,487		100.0		—		—		—		—		4,487
U.S. corporate debt securities		411		48.2		327		38.3		115		13.5		853
Foreign corporate debt securities		169		44.7		175		46.3		34		9.0		378
	$	6,953		90.9	$	541		7.1	$	152		2.0	$	7,646

Debt securities in an unrealized loss position at December 31, 2022, included bank loans totaling $107 million, of which $102 million were non-investment grade; high yield corporate debt securities totaling $44 million, all of which were non-investment grade; and emerging market debt securities totaling $53 million, of which $6 million were non-investment grade.

The credit ratings in the above tables reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the

above table in the “A- or higher” rating category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.