Investment Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

The following tables provide the amortized cost, unrealized gains and losses and fair value for the major categories of the available-for-sale debt and other securities and held-to-maturity securities portfolios as of December 31:


	2023
($ in millions)	Amortized Cost		Unrealized Gains	Unrealized Losses	Fair Value
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	4,477	1	(142)	4,336
Obligations of states and political subdivisions securities	2		—	—	2
Mortgage-backed securities:
Agency residential mortgage-backed securities	11,564		—	(1,282)	10,282
Agency commercial mortgage-backed securities	28,945		5	(3,230)	25,720
Non-agency commercial mortgage-backed securities	4,872		—	(427)	4,445
Asset-backed securities and other debt securities	5,207		3	(298)	4,912
Other securities(a)	722		—	—	722
Total available-for-sale debt and other securities	$	55,789	9	(5,379)	50,419
Held-to-maturity securities:

Asset-backed securities and other debt securities	$	2	—	—	2
Total held-to-maturity securities	$	2	—	—	2

(a)Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $224, $496 and $2, respectively, at December 31, 2023, that are carried at cost.


	2022
($ in millions)	Amortized Cost		Unrealized Gains	Unrealized Losses	Fair Value
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	2,683	—	(188)	2,495
Obligations of states and political subdivisions securities	18		—	—	18
Mortgage-backed securities:
Agency residential mortgage-backed securities	12,604		5	(1,372)	11,237
Agency commercial mortgage-backed securities	29,824		11	(3,513)	26,322
Non-agency commercial mortgage-backed securities	5,235		—	(520)	4,715
Asset-backed securities and other debt securities	6,292		3	(453)	5,842
Other securities(a)	874		—	—	874
Total available-for-sale debt and other securities	$	57,530	19	(6,046)	51,503
Held-to-maturity securities:
Obligations of states and political subdivisions securities	$	3	—	—	3
Asset-backed securities and other debt securities	2		—	—	2
Total held-to-maturity securities	$	5	—	—	5

(a)Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $381, $491 and $2, respectively, at December 31, 2022, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of December 31:


($ in millions)	2023		2022
Trading debt securities	$	899	414
Equity securities	613		317

The amounts reported in the preceding tables exclude accrued interest receivable on investment securities of $146 million and $131 million at December 31, 2023 and 2022, respectively, which is presented as a component of other assets in the Consolidated Balance Sheets.

The Bancorp uses investment securities as a means of managing interest rate risk, providing collateral for pledging purposes and for liquidity risk management. As part of managing interest rate risk, the Bancorp acquires securities as a component of its MSR non-qualifying hedging strategy, with net gains or losses recorded in securities losses, net – non-qualifying hedges on mortgage servicing rights in the Consolidated Statements of Income.

The following table presents the components of net securities gains and losses recognized in the Consolidated Statements of Income, including those recognized related to the Bancorp’s non-qualifying hedging strategy for MSRs, for the years ended December 31:


($ in millions)	2023		2022	2021
Available-for-sale debt and other securities:
Realized gains	$	34	16	34
Realized losses	(30)		(13)	(19)
Impairment losses	(5)		(1)	(19)
Net realized (losses) gains on available-for-sale debt and other securities	$	(1)	2	(4)
Trading debt securities:
Net realized losses	—		(2)	(2)
Net unrealized gains (losses)	3		11	(3)
Net trading debt securities gains (losses)	$	3	9	(5)
Equity securities:
Net realized gains	5		1	7
Net unrealized gains (losses)	11		(96)	(7)
Net equity securities gains (losses)	$	16	(95)	—
Total gains (losses) recognized in income from available-for-sale debt and other securities, trading debt securities and equity securities(a)	$	18	(84)	(9)

(a)Excludes $13 of net securities gains for the year ended December 31, 2023 and an immaterial amount and $7 of net securities losses for the years ended December 31, 2022 and 2021, respectively, related to securities held by FTS to facilitate the timely execution of customer transactions. These gains (losses) are included in commercial banking revenue and wealth and asset management revenue in the Consolidated Statements of Income.

The Bancorp recognized impairment losses on available-for-sale debt and other securities of $5 million, $1 million and $19 million during the years ended December 31, 2023, 2022 and 2021, respectively. These losses related to certain securities in unrealized loss positions where the Bancorp had determined that it no longer intended to hold the securities until the recovery of their amortized cost bases.

At both December 31, 2023 and 2022, the Bancorp completed its evaluation of the available-for-sale debt and other securities in an unrealized loss position and did not recognize an allowance for credit losses. The Bancorp did not recognize provision expense related to available-for-sale debt and other securities in an unrealized loss position during the years ended December 31, 2023, 2022 and 2021.

At December 31, 2023 and 2022, investment securities with a fair value of $25.2 billion and $11.0 billion, respectively, were pledged to secure borrowing capacity, public deposits, trust funds, derivative contracts and for other purposes as required or permitted by law.

The expected maturity distribution of the Bancorp’s mortgage-backed securities and the contractual maturity distribution of the remainder of the Bancorp’s available-for-sale debt and other securities and held-to-maturity securities as of December 31, 2023 are shown in the following table:


	Available-for-Sale Debt and Other			Held-to-Maturity
($ in millions)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
Due in 1 year or less	$	756	746	—	—
Due after 1 year through 5 years	18,493		17,429	—	—
Due after 5 years through 10 years	26,194		23,165	—	—
Due after 10 years	9,624		8,357	2	2
Other securities	722		722	—	—
Total	$	55,789	50,419	2	2

(a)Actual maturities may differ from contractual maturities when a right to call or prepay obligations exists with or without call or prepayment penalties.

The following table provides the fair value and gross unrealized losses on available-for-sale debt and other securities in an unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of December 31:


	Less than 12 months			12 months or more		Total
($ in millions)	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
2023
U.S. Treasury and federal agencies securities	$	1,989	(3)	2,157	(139)	4,146	(142)

Agency residential mortgage-backed securities	81		(2)	10,200	(1,280)	10,281	(1,282)
Agency commercial mortgage-backed securities	5,439		(556)	19,957	(2,674)	25,396	(3,230)
Non-agency commercial mortgage-backed securities	141		(2)	4,284	(425)	4,425	(427)
Asset-backed securities and other debt securities	340		(17)	4,184	(281)	4,524	(298)
Total	$	7,990	(580)	40,782	(4,799)	48,772	(5,379)
2022
U.S. Treasury and federal agencies securities	$	2,400	(188)	—	—	2,400	(188)
Obligations of states and political subdivisions securities	—		—	1	—	1	—
Agency residential mortgage-backed securities	10,078		(1,170)	938	(202)	11,016	(1,372)
Agency commercial mortgage-backed securities	22,083		(2,487)	3,697	(1,026)	25,780	(3,513)
Non-agency commercial mortgage-backed securities	3,621		(272)	1,059	(248)	4,680	(520)
Asset-backed securities and other debt securities	3,164		(178)	2,495	(275)	5,659	(453)
Total	$	41,346	(4,295)	8,190	(1,751)	49,536	(6,046)

At December 31, 2023 and 2022, $45 million and $42 million, respectively, of unrealized losses in the available-for-sale debt and other securities portfolio were related to non-rated securities.

In January 2024, the Bancorp transferred $12.6 billion (amortized cost basis) of securities from available-for-sale to held-to-maturity to reflect the Bancorp’s change in intent to hold these securities to maturity in order to reduce potential capital volatility associated with investment security market price fluctuations. AOCI included pretax unrealized losses of $994 million on these securities at the date of transfer. The unrealized losses that existed on the date of transfer will continue to be reported as a component of AOCI and will be amortized into income over the remaining life of the securities as an adjustment to yield, offsetting the amortization of the discount resulting from the transfer recorded at fair value.