Investment Securities

12 Months Ended

Dec. 31, 2025

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

Investment securities principally include available-for-sale (AFS) debt securities carried at fair value on the Consolidated Balance Sheets. The methodology for estimating credit losses for AFS debt securities requires us to estimate lifetime credit losses for all AFS debt securities in an unrealized loss position. When estimating a security’s probability of default and the recovery rate, we assess the security’s credit indicators, including credit ratings. If our assessment indicates that an estimated credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the estimated credit loss through 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 AFS debt securities totaling $3 million as of both December 31, 2025 and 2024, 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 and recorded in the Consolidated Statements of Income as Other, net expense.

Refer to Note 14 for a description of our methodology for determining the fair value of investment securities.

The following is a summary of investment securities as of December 31, 2025 and 2024:

TABLE 4.1: INVESTMENT SECURITIES


	2025								2024
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	$	54	$	1	$	(7)	$	48	$	57	$	1	$	(9)	$	49
U.S. Government agency obligations	3		—		—		3		4		—		—		4
U.S. Government treasury obligations	138		1		—		138		289		—		(2)		287
Mortgage-backed securities (a)	10		—		—		9		11		—		(1)		10
Foreign government bonds and obligations	717		—		—		717		765		—		—		765
Other (b)	81		—		—		81		77		—		—		77
Equity securities (c)	54		—		(8)		46		53		4		(9)		48
Total	$	1,056	$	2	$	(16)	$	1,043	$	1,256	$	5	$	(21)	$	1,240

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

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

(c)Equity securities comprise investments in common stock and mutual funds.

The following table provides information about our AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2025 and 2024:

TABLE 4.2: AFS DEBT SECURITIES WITH GROSS UNREALIZED LOSSES BY DURATION


	2025								2024
	Less than 12 months				12 months or more				Less than 12 months				12 months or more
Description of Securities (Millions)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
State and municipal obligations	$	—	$	—	$	26	$	(7)	$	—	$	—	$	22	$	(9)
U.S. Government treasury obligations	—		—		—		—		—		—		123		(2)
Mortgage-backed securities	—		—		—		—		—		—		7		(1)

Total	$	—	$	—	$	26	$	(7)	$	—	$	—	$	152	$	(12)

The gross unrealized losses on our AFS debt securities are primarily attributable to an increase in the current benchmark interest rate. Overall, for the AFS debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses and (iii) we expect that the contractual principal and interest will be received on the securities. We concluded that there was no credit loss attributable to the securities in an unrealized loss position for the periods presented.

Weighted average yields and contractual maturities for AFS debt securities with stated maturities as of December 31, 2025 were as follows:

TABLE 4.3: WEIGHTED AVERAGE YIELDS AND CONTRACTUAL MATURITIES OF AFS DEBT SECURITIES


(Millions)	Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years through 10 years			Due after 10 years			Total
State and municipal obligations (a)	$	—		$	21		$	1		$	26		$	48
U.S. Government agency obligations (a)	—			—			—			3			3
U.S. Government treasury obligations	80			59			—			—			138

Mortgage-backed securities (a)(b)	—			—			—			9			9
Foreign government bonds and obligations	714			3			—			—			717
Other (c)	32			44			5			—			81
Total Estimated Fair Value	$	826		$	127		$	7		$	37		$	997

Total Cost	$	825		$	126		$	7		$	45		$	1,002
Weighted average yield (d)	5.31		%	4.17		%	3.48		%	2.69		%	5.04		%

(a)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.

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

(c)Represents investments in debt securities issued by Community Development Financial Institutions.

(d)Weighted average yields for investment securities have been calculated using the effective yield on the date of purchase. Yields on tax-exempt investment securities have been computed on a tax-equivalent basis using the U.S. federal statutory tax rate of 21 percent.