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Investment Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The following tables summarize the Company’s portfolio of debt securities available for sale and equity investments with readily determinable fair values:

			June 30, 2023
(in millions)			Amortized Cost						Gross Unrealized Gain						Gross Unrealized Loss						Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates			$	1,366					$	—					$	162					$	1,204
GSE CMOs			3,942						—						369						3,573
Private Label CMOs			180						4						1						183
Total mortgage-related debt securities			$	5,488					$	4					$	532					$	4,960
Other Debt Securities:
U. S. Treasury obligations			$	—					$	—					$	—					$	—
GSE debentures			1,974						—						330						1,644
Asset-backed securities (1)			332						—						9						323
Municipal bonds			7						—						—						7
Corporate bonds			789						3						39						753
Foreign notes			10						—						2						8
Capital trust notes			96						5						14						87
Total other debt securities			$	3,208					$	8					$	394					$	2,822
Total debt securities available for sale			$	8,696					$	12					$	926					$	7,782
Equity securities:
Mutual funds			$	16					$	—					$	2					$	14
Total equity securities			$	16					$	—					$	2					$	14
Total securities (2)			$	8,712					$	12					$	928					$	7,796

(1)The underlying assets of the asset-backed securities are substantially guaranteed by the U.S. Government.

(2)Excludes accrued interest receivable of $32 million included in other assets in the Consolidated Statements of Condition.

			December 31, 2022
(in millions)			Amortized Cost						Gross Unrealized Gain						Gross Unrealized Loss						Fair Value
Debt securities available-for-sale
Mortgage-Related Debt Securities:
GSE certificates			$	1,457					$	—					$	160					$	1,297
GSE CMOs			3,600						1						300						3,301
Private Label CMOs			185						6						—						191
Total mortgage-related debt securities			$	5,242					$	7					$	460					$	4,789
Other Debt Securities:
U. S. Treasury obligations			$	1,491					$	—					$	4					$	1,487
GSE debentures			1,749						—						351						1,398
Asset-backed securities (1)			375						—						14						361
Municipal bonds			30						—						—						30
Corporate bonds			913						2						30						885
Foreign Notes			20						—						—						20
Capital trust notes			97						5						12						90
Total other debt securities			$	4,675					$	7					$	411					$	4,271
Total other securities available for sale			$	9,917					$	14					$	871					$	9,060
Equity securities:
Mutual funds			$	16					$	—					$	2					$	14
Total equity securities			$	16					$	—					$	2					$	14
Total securities (2)			$	9,933					$	14					$	873					$	9,074

(1)The underlying assets of the asset-backed securities are substantially guaranteed by the U.S. Government.

(2)Excludes accrued interest receivable of $31 million included in other assets in the Consolidated Statements of Condition.

At June 30, 2023, the Company had $605 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2022, the Company had $762 million and $329 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively. The Company maintains an investment in FHLB-NY stock partly in conjunction with its membership in the FHLB and partly related to its access to the FHLB funding it utilizes. In addition, at June 30, 2023, the Company had $203 million of Federal Reserve Bank stock, at cost. The Company had $176 million of Federal Reserve Bank stock, at December 31, 2022.

For both the six months ended June 30, 2023 and 2022 there were realized losses on equity securities of $1 million recognized in earnings.

The following table summarizes, by contractual maturity, the amortized cost of securities at June 30, 2023:

			Mortgage- Related Securities						U.S. Government and GSE Obligations						State, County, and Municipal						Other Debt Securities (1)						Fair Value
( in millions)
Available-for-Sale Debt Securities:
Due within one year			$	20					$	247					$	—					$	20					$	283
Due from one to five years			175						200						—						432						795
Due from five to ten years			322						1,377						7						409						1,738
Due after ten years			4,971						150						—						367						4,966
Total debt securities available for sale			$	5,488					$	1,974					$	7					$	1,228					$	7,782

(1)Includes corporate bonds, capital trust notes, foreign notes, and asset-backed securities.

The following table presents securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of June 30, 2023:

			Less than Twelve Months												Twelve Months or Longer												Total
(in millions)			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations			$	—					$	—					$	—					$	—					$	—					$	—
U.S. Government agency and GSE obligations			$	221					$	1					$	1,399					$	328					$	1,620					$	329
GSE certificates			458						14						739						148						1,197						162
Private Label CMOs			20						1						—						—						20						1
GSE CMOs			2,391						81						1,182						288						3,573						369
Asset-backed securities			34						—						289						9						323						9
Municipal bonds			—						—						6						1						6						1
Corporate bonds			38						5						383						34						421						39
Foreign notes			8						2						—						—						8						2
Capital trust notes			1						—						78						14						79						14
Equity securities			—						—						14						2						14						2
Total temporarily impaired securities			$	3,171					$	104					$	4,090					$	824					$	7,261					$	928

The following table presents securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of December 31, 2022:

			Less than Twelve Months												Twelve Months or Longer												Total
(in millions)			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
Temporarily Impaired Securities:
U. S. Treasury obligations			$	1,487					$	4					$	—					$	—					$	1,487					$	4
U.S. Government agency and GSE obligations			243						5						1,156						346						1,399						351
GSE certificates			871						46						420						114						1,291						160
GSE CMOs			2,219						36						925						264						3,144						300
Asset-backed securities			61						2						262						12						323						14
Municipal bonds			9						—						7						—						16						—
Corporate bonds			698						27						97						4						795						31
Foreign notes			20						—						—						—						20						—
Capital trust notes			46						2						34						10						80						12
Equity securities			4						—						10						2						14						2
Total temporarily impaired securities			$	5,658					$	122					$	2,911					$	752					$	8,569					$	874

The investment securities designated as having a continuous loss position for twelve months or more at June 30, 2023 consisted of fifty-nine agency collateralized mortgage obligations, six capital trusts notes, nine asset-backed securities, ten corporate bonds, thirty-eight US government agency bonds, 249 mortgage-backed securities, one mutual fund, and one municipal bond. The investment securities designated as having a continuous loss position for twelve months or more at December 31, 2022 consisted of twenty-three agency collateralized mortgage obligations, five capital trusts notes, seven asset-backed securities, two corporate bonds, thirty-three US government agency bonds, 133 mortgage-backed securities, one mutual fund, and one municipal bond.

The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. We also assess whether (i) we intend to sell, or (ii) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, any previously recognized allowances are charged off and the security’s amortized cost basis is written down to fair value through income. If neither of the aforementioned criteria are met, we evaluate whether the decline in fair value has resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited

by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

In the first quarter of 2023, the company held a $20 million corporate bond in Signature Bank which was placed into receivership on March 12, 2023. We have taken a $20 million provision for credit loss and charged-off this security during the three months ended March 31, 2023.

None of the remaining unrealized losses identified as of June 30, 2023 or December 31, 2022 relates to the marketability of the securities or the issuers’ ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Management based this conclusion on an analysis of each issuer including a detailed credit assessment of each issuer. 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 basis, which may be at maturity. As such, no allowance for credit losses remains with respect to debt securities as of June 30, 2023.

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- Definition

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

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-Topic 320
-Name Accounting Standards Codification
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