Investment Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets. Unrealized losses attributable to credit deterioration are recorded in the Consolidated Statements of Income in Other loans Provision for credit losses. Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. We had accrued interest on our available-for-sale debt securities totaling $38 million and $26 million as of September 30, 2021 and December 31, 2020, respectively, presented as Other assets on the Consolidated Balance Sheets.

Investment securities also include equity securities carried at fair value on the Consolidated Balance Sheets with unrealized gains and losses recorded in the Consolidated Statements of Income as Other, net expense.

Realized gains and losses are recognized upon disposition of the securities using the specific identification method.

The following is a summary of investment securities as of September 30, 2021 and December 31, 2020:


	2021								2020
Description of Securities (Millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale debt securities:
State and municipal obligations	$	102	$	5	$	(1)	$	106	$	172	$	7	$	—	$	179
U.S. Government agency obligations	6		—		—		6		7		—		—		7
U.S. Government treasury obligations	8,718		39		—		8,757		20,655		76		—		20,731
Mortgage-backed securities (a)	19		2		—		21		28		2		—		30
Foreign government bonds and obligations	556		—		—		556		581		—		—		581
Other (b)	41		—		—		41		22		—		—		22
Equity securities (c)(d)	58		46		(2)		102		56		27		(2)		81
Total	$	9,500	$	92	$	(3)	$	9,589	$	21,521	$	112	$	(2)	$	21,631

(a)Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.

(b)Represents investments in Corporate debt securities and debt securities issued by Community Development Financial Institutions.

(c)Equity securities comprise investments in common stock, exchange-traded funds and mutual funds.

(d)During the third quarter of 2021, certain equity securities were reclassified from Other assets to Investment securities following the completion of initial public offerings by the issuers of the securities. The investments had a fair value of $51 million with an associated cost basis of $7 million as of September 30, 2021. The gross unrealized gains amount includes $5 million that was recognized during 2018.

There were no available-for-sale debt securities with gross unrealized losses as of both September 30, 2021 and December 31, 2020.

Contractual maturities for investment securities with stated maturities as of September 30, 2021 were as follows:


(Millions)	Cost		Estimated Fair Value
Due within 1 year	$	8,453	$	8,460
Due after 1 year but within 5 years	879		909
Due after 5 years but within 10 years	35		41
Due after 10 years	75		77
Total	$	9,442	$	9,487

The expected payments on state and municipal obligations, U.S. government agency obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.