Investment Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENT SECURITIES

A summary of the Corporation’s investment securities follows:

(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities	$	3,821	$	44	$	21	$	3,844
Residential mortgage-backed securities (a)	11,924		156		87		11,993
Total investment securities available-for-sale	$	15,745	$	200	$	108	$	15,837
December 31, 2020
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities	$	4,583	$	76	$	1	$	4,658
Residential mortgage-backed securities (a)	10,169		203		2		10,370
Total investment securities available-for-sale	$	14,752	$	279	$	3	$	15,028

(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

A summary of the Corporation’s investment securities in an unrealized loss position as of June 30, 2021 and December 31, 2020 follows:

	Temporarily Impaired
	Less than 12 Months				12 Months or more				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2021
U.S. Treasury and other U.S. government agency securities	$	1,830	$	21	$	—	$	—	$	1,830	$	21
Residential mortgage-backed securities (a)	3,437		81		198		6		3,635		87
Total temporarily impaired securities	$	5,267	$	102	$	198	$	6	$	5,465	$	108
December 31, 2020
U.S. Treasury and other U.S. government agency securities	$	1,119	$	1	$	—	$	—	$	1,119	$	1
Residential mortgage-backed securities (a)	952		2		—		—		952		2
Total temporarily impaired securities	$	2,071	$	3	$	—	$	—	$	2,071	$	3

(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

Unrealized losses resulted from changes in market interest rates and liquidity. The Corporation’s portfolio is comprised of securities issued or guaranteed by the U.S. government or government-sponsored enterprises. As such, it is expected that the securities would not be settled at a price less than the amortized cost of the investments. Further, the Corporation does not intend to sell the investments, and it is not more likely than not that it will be required to sell the investments before recovery of amortized costs. At June 30, 2021, the Corporation had 139 securities in an unrealized loss position with no allowance for credit losses, comprised of 19 U.S. Treasury securities and 120 residential mortgage-backed securities.

Interest receivable on investment securities totaled $20 million at June 30, 2021 and $18 million at December 31, 2020 and was included in accrued income and other assets on the Consolidated Balance Sheets.

Sales, calls and write-downs of investment securities available-for-sale resulted in the following losses recorded in net securities gains on the Consolidated Statements of Comprehensive Income, computed based on the adjusted cost of the specific security.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2021		2020		2021		2020
Securities gains	$	—	$	1	$	—	$	1
Securities losses	—		—		—		(1)
Net securities gains	$	—	$	1	$	—	$	—

The following table summarizes the amortized cost and fair values of debt securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(in millions)
June 30, 2021	Amortized Cost		Fair Value
Contractual maturity
Within one year	$	868	$	876
After one year through five years	3,151		3,179
After five years through ten years	536		551
After ten years	11,190		11,231
Total investment securities	$	15,745	$	15,837

Included in the contractual maturity distribution in the table above were residential mortgage-backed securities with a total amortized cost of $11.9 billion and a fair value of $12.0 billion. The actual cash flows of mortgage-backed securities may differ as borrowers of the underlying loans may exercise prepayment options.

At June 30, 2021, investment securities with a carrying value of $4.0 billion were pledged where permitted or required by law, including $3.2 billion pledged to the Federal Home Loan Bank (FHLB) as collateral for potential future borrowings of approximately $3.1 billion and $830 million to secure $631 million of liabilities, primarily public and other deposits of state and local government agencies as well as derivative instruments. For information on FHLB borrowings, refer to Note 7.