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Investment securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investment securities

3. Investment securities

The amortized cost and estimated fair value of investment securities were as follows:

(Dollars in millions)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

7,818

 

 

$

—

 

 

$

113

 

 

$

7,705

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

425

 

 

 

—

 

 

 

9

 

 

 

416

 

Residential

 

 

2,272

 

 

 

—

 

 

 

118

 

 

 

2,154

 

Other debt securities

 

 

176

 

 

 

—

 

 

 

11

 

 

 

165

 

 

 

 

10,691

 

 

 

—

 

 

 

251

 

 

 

10,440

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

1,005

 

 

 

—

 

 

 

31

 

 

 

974

 

Obligations of states and political subdivisions

 

 

2,501

 

 

 

—

 

 

 

67

 

 

 

2,434

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

2,033

 

 

 

—

 

 

 

130

 

 

 

1,903

 

Residential

 

 

9,747

 

 

 

4

 

 

 

802

 

 

 

8,949

 

Privately issued

 

 

42

 

 

 

9

 

 

 

5

 

 

 

46

 

Other debt securities

 

 

2

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

 

15,330

 

 

 

13

 

 

 

1,035

 

 

 

14,308

 

Total debt securities

 

$

26,021

 

 

$

13

 

 

$

1,286

 

 

$

24,748

 

Equity and other securities:

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable equity — at fair value

 

$

266

 

 

$

5

 

 

$

3

 

 

$

268

 

Other — at cost

 

 

859

 

 

 

—

 

 

 

—

 

 

 

859

 

Total equity and other securities

 

$

1,125

 

 

$

5

 

 

$

3

 

 

$

1,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

7,914

 

 

$

—

 

 

$

243

 

 

$

7,671

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

595

 

 

 

—

 

 

 

21

 

 

 

574

 

Residential

 

 

2,501

 

 

 

—

 

 

 

171

 

 

 

2,330

 

Other debt securities

 

 

183

 

 

 

1

 

 

 

10

 

 

 

174

 

 

 

 

11,193

 

 

 

1

 

 

 

445

 

 

 

10,749

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

1,054

 

 

 

—

 

 

 

46

 

 

 

1,008

 

Obligations of states and political subdivisions

 

 

2,577

 

 

 

—

 

 

 

117

 

 

 

2,460

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

912

 

 

 

—

 

 

 

103

 

 

 

809

 

Residential

 

 

8,935

 

 

 

1

 

 

 

891

 

 

 

8,045

 

Privately issued

 

 

50

 

 

 

9

 

 

 

8

 

 

 

51

 

Other debt securities

 

 

2

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

 

13,530

 

 

 

10

 

 

 

1,165

 

 

 

12,375

 

Total debt securities

 

$

24,723

 

 

$

11

 

 

$

1,610

 

 

$

23,124

 

Equity and other securities:

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable equity — at fair value

 

$

153

 

 

$

2

 

 

$

4

 

 

$

151

 

Other — at cost

 

 

781

 

 

 

—

 

 

 

—

 

 

 

781

 

Total equity and other securities

 

$

934

 

 

$

2

 

 

$

4

 

 

$

932

 

 

No investment in securities of a single non-U.S. Government, government agency or government guaranteed issuer exceeded ten percent of shareholders’ equity at December 31, 2023.

As of December 31, 2023, the latest available investment ratings of all obligations of states and political subdivisions, privately issued mortgage-backed securities and other debt securities were:

 

 

 

 

 

 

 

 

Average Credit Rating of Fair Value Amount

 

(Dollars in millions)

 

Amortized
Cost

 

 

Estimated
Fair Value

 

 

A or
Better

 

 

BBB

 

 

BB

 

 

B or Less

 

 

Not
Rated

 

Obligations of states and
    political subdivisions

 

$

2,501

 

 

$

2,434

 

 

$

2,426

 

 

$

1

 

 

$

—

 

 

$

—

 

 

$

7

 

Privately issued mortgage-
    backed securities

 

 

42

 

 

 

46

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

45

 

Other debt securities

 

 

178

 

 

 

167

 

 

 

8

 

 

 

73

 

 

 

31

 

 

 

—

 

 

 

55

 

There were no significant gross realized gains or losses from sales of investment securities in 2023, 2022 or 2021.

At December 31, 2023, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:

(Dollars in millions)

 

Amortized
Cost

 

 

Estimated
Fair Value

 

Debt securities available for sale:

 

 

 

 

 

 

Due in one year or less

 

$

5,023

 

 

$

4,970

 

Due after one year through five years

 

 

2,921

 

 

 

2,856

 

Due after five years through ten years

 

 

50

 

 

 

44

 

Due after ten years

 

 

—

 

 

 

—

 

 

 

 

7,994

 

 

 

7,870

 

Mortgage-backed securities

 

 

2,697

 

 

 

2,570

 

 

 

$

10,691

 

 

$

10,440

 

Debt securities held to maturity:

 

 

 

 

 

 

Due in one year or less

 

$

15

 

 

$

14

 

Due after one year through five years

 

 

1,179

 

 

 

1,147

 

Due after five years through ten years

 

 

1,351

 

 

 

1,327

 

Due after ten years

 

 

963

 

 

 

922

 

 

 

 

3,508

 

 

 

3,410

 

Mortgage-backed securities

 

 

11,822

 

 

 

10,898

 

 

 

$

15,330

 

 

$

14,308

 

 

A summary of investment securities that as of December 31, 2023 and 2022 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:

 

 

Less Than 12 Months

 

 

12 Months or More

 

(Dollars in millions)

 

Fair
Value

 

 

Unrealized
Losses

 

 

Fair
Value

 

 

Unrealized
Losses

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

229

 

 

$

1

 

 

$

7,474

 

 

$

112

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

74

 

 

 

1

 

 

 

330

 

 

 

8

 

Residential

 

 

151

 

 

 

2

 

 

 

1,959

 

 

 

116

 

Other debt securities

 

 

6

 

 

 

—

 

 

 

154

 

 

 

11

 

 

 

 

460

 

 

 

4

 

 

 

9,917

 

 

 

247

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

50

 

 

 

—

 

 

 

924

 

 

 

31

 

Obligations of states and political subdivisions

 

 

218

 

 

 

3

 

 

 

2,172

 

 

 

64

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

328

 

 

 

9

 

 

 

1,575

 

 

 

121

 

Residential

 

 

955

 

 

 

11

 

 

 

7,139

 

 

 

791

 

Privately issued

 

 

—

 

 

 

—

 

 

 

34

 

 

 

5

 

 

 

 

1,551

 

 

 

23

 

 

 

11,844

 

 

 

1,012

 

Total

 

$

2,011

 

 

$

27

 

 

$

21,761

 

 

$

1,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

6,707

 

 

$

184

 

 

$

842

 

 

$

59

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

574

 

 

 

21

 

 

 

—

 

 

 

—

 

Residential

 

 

2,296

 

 

 

169

 

 

 

29

 

 

 

2

 

Other debt securities

 

 

93

 

 

 

4

 

 

 

73

 

 

 

6

 

 

 

 

9,670

 

 

 

378

 

 

 

944

 

 

 

67

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

1,008

 

 

 

46

 

 

 

—

 

 

 

—

 

Obligations of states and political subdivisions

 

 

2,449

 

 

 

117

 

 

 

—

 

 

 

—

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

809

 

 

 

103

 

 

 

—

 

 

 

—

 

Residential

 

 

6,293

 

 

 

619

 

 

 

1,319

 

 

 

272

 

Privately issued

 

 

—

 

 

 

—

 

 

 

36

 

 

 

8

 

 

 

 

10,559

 

 

 

885

 

 

 

1,355

 

 

 

280

 

Total

 

$

20,229

 

 

$

1,263

 

 

$

2,299

 

 

$

347

 

The Company owned 4,022 individual debt securities with aggregate gross unrealized losses of $1.3 billion at December 31, 2023. Based on a review of each of the securities in the investment securities portfolio at December 31, 2023, the Company concluded that it expected to recover the amortized cost basis of its investment. As of December 31, 2023, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired investment securities at a loss.

At December 31, 2023, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $859 million of cost method investment securities.

The Company estimated no material allowance for credit losses for its investment securities classified as held-to-maturity at December 31, 2023 or December 31, 2022.

At December 31, 2023 and 2022, investment securities with carrying values of $8.2 billion (including $393 million related to repurchase transactions) and $7.9 billion (including $567 million related to repurchase transactions), respectively, were pledged to secure borrowings, lines of credit and governmental deposits as described in note 9.