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Investment Securities
12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Our investment securities portfolio consists of (i) an AFS securities portfolio and a HTM securities portfolio, both of which represent interest-earning investment securities and (ii) a non-marketable and other equity securities portfolio, which primarily represents investments managed as part of our funds management business, investments in qualified affordable housing projects, as well as public equity securities held as a result of equity warrant assets exercised.
AFS Securities
The major components of our AFS investment securities portfolio at December 31, 2022, and 2021 are as follows:
 December 31, 2022
(Dollars in millions)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Carrying
Value
AFS securities, at fair value:
U.S. Treasury securities$17,206 $— $(1,071)$16,135 
U.S. agency debentures120 — (19)101 
Foreign government debt securities1,209 — (121)1,088 
Residential MBS:
Agency-issued MBS7,701 — (1,098)6,603 
Agency-issued CMO—fixed rate762 — (84)678 
Agency-issued CMBS1,604 — (140)1,464 
Total AFS securities (1)$28,602 $— $(2,533)$26,069 
(1)Securities pledged as collateral for securities sold under agreements to repurchase totaled $530 million. For additional information, see Note 15—“Short-Term Borrowings and Long-Term Debt."
 December 31, 2021
(Dollars in millions)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Carrying
Value
AFS securities, at fair value:
U.S. Treasury securities$15,799 $121 $(70)$15,850 
U.S. agency debentures200 — (4)196 
Foreign government debt securities61 — — 61 
Residential MBS:
Agency-issued MBS8,786 13 (210)8,589 
Agency-issued CMO—fixed rate988 (9)982 
Agency-issued CMBS1,536 27 (20)1,543 
Total AFS securities (1)$27,370 $164 $(313)$27,221 
(1)Securities pledged as collateral for securities sold under agreements to repurchase totaled $61 million. For additional information, see Note 15—“Short-Term Borrowings and Long-Term Debt."
The following table summarizes sale activity of AFS securities as recorded in the line item “Gains (losses) on investment securities, net," a component of noninterest income:
 Year ended December 31,
(Dollars in millions)202220212020
Sales proceeds$9,495 $1,591 $2,654 
Net realized gains and losses:
Gross realized gains146 31 61 
Gross realized losses(125)— — 
Net realized gains (losses)$21 $31 $61 
The following tables summarize our AFS securities in an unrealized loss position for which an ACL has not been recorded and summarized into categories of AFS securities that were in an unrealized loss position for less than 12 months, or 12 months or longer, as of December 31, 2022, and December 31, 2021:
 December 31, 2022
 Less than 12 months12 months or longerTotal
(Dollars in millions)Fair Value of
Investments
Unrealized
Losses
Fair Value of
Investments
Unrealized
Losses
Fair Value of
Investments
Unrealized
Losses
AFS securities, at fair value:
U.S. Treasury securities$11,946 $(717)$4,189 $(354)$16,135 $(1,071)
U.S. agency debentures— — 101 (19)101 (19)
Foreign government debt securities1,088 (121)— — 1,088 (121)
Residential MBS:
Agency-issued MBS1,744 (203)4,859 (895)6,603 (1,098)
Agency-issued CMO —fixed rate136 (11)542 (73)678 (84)
Agency-issued CMBS810 (57)653 (83)1,463 (140)
Total AFS securities (1)$15,724 $(1,109)$10,344 $(1,424)$26,068 $(2,533)
(1)As of December 31, 2022, we identified a total of 810 investments that were in unrealized loss positions with 346 investments in an unrealized loss position for a period of time greater than 12 months. Based on our analysis of the securities in an unrealized loss position as of December 31, 2022, the decline in value is unrelated to credit loss and is related to changes in market interest rates since purchase, and therefore, changes in value for securities are included in other comprehensive income. Market valuations and credit loss analyses on assets in the AFS securities portfolio are reviewed and monitored on a quarterly basis. As of December 31, 2022, we do not intend to sell any of our securities in an unrealized loss position prior to recovery of our amortized cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our amortized cost basis. None of the investments in our AFS securities portfolio were past due as of December 31, 2022.
 December 31, 2021
 Less than 12 months12 months or longerTotal
(Dollars in millions)Fair Value of
Investments
Unrealized
Losses
Fair Value of
Investments
Unrealized
Losses
Fair Value of
Investments
Unrealized
Losses
AFS securities:
U.S. Treasury securities$7,777 $(70)$— $— $7,777 $(70)
U.S. agency debentures196 (4)— — 196 (4)
Residential MBS:
Agency-issued MBS8,280 (210)— — 8,280 (210)
Agency-issued CMO —fixed rate740 (9)— — 740 (9)
Agency-issued CMBS603 (11)163 (9)766 (20)
Total AFS securities (1)$17,596 $(304)$163 $(9)$17,759 $(313)
(1)As of December 31, 2021, we identified a total of 475 investments that were in unrealized loss positions, of which 4 investments are in an unrealized loss position for a period of time greater than 12 months. None of the investments in our AFS securities portfolio were past due as of December 31, 2021.
The following table summarizes the fixed income securities, carried at fair value, classified as AFS as of December 31, 2022, by the remaining contractual principal maturities. For U.S. Treasury securities, U.S. agency debentures and foreign government debt securities, the expected maturity is the actual contractual maturity of the notes. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as AFS typically have original contractual maturities from 10 to 30 years, whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments.
 December 31, 2022
(Dollars in millions)TotalOne Year
or Less
After One
Year to
Five Years
After Five
Years to
Ten Years
After
Ten Years
U.S. Treasury securities$16,135 $983 $14,373 $779 $— 
U.S. agency debentures101 — 33 68 — 
Foreign government debt securities1,088 101 52 935 — 
Residential MBS:
Agency-issued MBS6,603 — — 43 6,560 
Agency-issued CMO—fixed rate678 — — — 678 
Agency-issued CMBS1,464 — 326 1,138 — 
Total$26,069 $1,084 $14,784 $2,963 $7,238 
HTM Securities
During the year ended December 31, 2021, we re-designated certain securities from the classification of AFS to HTM. The securities re-designated consisted of agency-issued CMO's, CMBS', MBS' and U.S. agency debentures with a total carrying value of $8.8 billion. At the time of re-designation the securities included $132 million of pretax net unrealized losses in other comprehensive income and are being amortized over the life of the securities in a manner consistent with the amortization of a premium or discount. Our decision to re-designate the securities was based on our ability and intent to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding. HTM securities are carried on the balance sheet at amortized cost and the changes in the value of these securities, other than an ACL, are not reported on the financial statements. There were no re-designations during 2022.
The components of our HTM investment securities portfolio at December 31, 2022, and December 31, 2021, are as follows:
 December 31, 2022
(Dollars in millions)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair ValueACL (2)Net Carry Value
HTM securities, at cost:
U.S. agency debentures (1)$486 $— $(52)$434 $— $486 
Residential MBS:
Agency-issued MBS57,705 — (9,349)48,356 — 57,705 
Agency-issued CMO—fixed rate10,461 — (1,885)8,576 — 10,461 
Agency-issued CMO—variable rate79 — (2)77 — 79 
Agency-issued CMBS14,471 — (2,494)11,977 — 14,471 
Municipal bonds and notes7,417 (1,269)6,150 7,416 
Corporate bonds708 — (109)599 703 
Total HTM securities$91,327 $$(15,160)$76,169 $$91,321 
(1)    Consists of pools of Small Business Investment Company debentures issued and guaranteed by the SBA, an independent agency of the United States.
(2)    Refer to Note 2—“Summary of Significant Accounting Policies” for more information on our credit loss methodology.
 December 31, 2021
(Dollars in millions)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair ValueACL (2)Net Carry Value
HTM securities, at amortized cost:
U.S. agency debentures (1)$609 $$(2)$615 $— $609 
Residential MBS:
Agency-issued MBS64,439 124 (887)63,676 — 64,439 
Agency-issued CMO—fixed rate10,226 (145)10,090 — 10,226 
Agency-issued CMO—variable rate100 — 101 — 100 
Agency-issued CMBS14,959 39 (277)14,721 — 14,959 
Municipal bonds and notes7,157 185 (27)7,315 7,156 
Corporate bonds712 (5)709 706 
Total HTM securities$98,202 $368 $(1,343)$97,227 $$98,195 
(1)    Consists of pools of Small Business Investment Company debentures issued and guaranteed by the SBA, an independent agency of the United States.
(2)    Refer to Note 2—“Summary of Significant Accounting Policies” for more information on our credit loss methodology.
Allowance for Credit Losses for HTM Securities
For the year ended December 31, 2022, HTM securities beginning ACL balance was $7 million, the reduction of credit losses was $1 million, and the ending ACL balance was $6 million.
For the year ended December 31, 2021 HTM securities beginning ACL balance of less than $1 million, a provision for credit losses of $7 million and an ending ACL balance of $7 million.
Credit Quality Indicators
On a quarterly basis, management monitors the credit quality for HTM securities through the use of standard credit ratings. The following table summarizes our amortized cost of HTM securities aggregated by credit quality indicator at December 31, 2022, and December 31, 2021:
December 31,
(Dollars in millions)20222021
Municipal bonds and notes:
Aaa$4,263 $3,774 
Aa11,843 2,031 
Aa21,113 1,154 
Aa3171 172 
A127 26 
Total municipal bonds and notes$7,417 $7,157 
Corporate bonds:
Aaa$39 $39 
Aa242 42 
Aa3127 105 
A1280 251 
A2209 264 
A311 11 
Total corporate bonds$708 $712 
The following table summarizes the remaining contractual principal maturities on fixed income investment securities classified as HTM as of December 31, 2022. For U.S. agency debentures, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as HTM typically have original contractual maturities from 10 to 30, years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments; however, we expect to collect substantially all of the recorded investment on these securities.
 December 31, 2022
 TotalOne Year
or Less
After One Year to
Five Years
After Five Years to
Ten Years
After
Ten Years
(Dollars in millions)Net Carry ValueFair ValueNet Carry ValueFair ValueNet Carry ValueFair ValueNet Carry ValueFair ValueNet Carry ValueFair Value
U.S. agency debentures$486 $434 $$$118 $111 $367 $322 $— $— 
Residential MBS:
Agency-issued MBS57,705 48,356 — — 25 24 1,066 994 56,614 47,338 
Agency-issued CMO—fixed rate10,461 8,576 — — 90 86 129 120 10,242 8,370 
Agency-issued CMO—variable rate79 77 — — — — — — 79 77 
Agency-issued CMBS14,471 11,977 39 38 153 141 966 810 13,313 10,988 
Municipal bonds and notes7,416 6,150 29 29 235 224 1,362 1,244 5,790 4,653 
Corporate bonds703 599 — — 115 103 588 496 — — 
Total$91,321 $76,169 $69 $68 $736 $689 $4,478 $3,986 $86,038 $71,426 
Non-marketable and Other Equity Securities
The major components of our non-marketable and other equity securities portfolio at December 31, 2022, and December 31, 2021, are as follows:
December 31,
(Dollars in millions)20222021
Non-marketable and other equity securities:
Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments (1)$147 $130 
Unconsolidated venture capital and private equity fund investments (2)110 208 
Other investments without a readily determinable fair value (3)183 164 
Other equity securities in public companies (fair value accounting) (4)32 117 
Non-marketable securities (equity method accounting) (5):
Venture capital and private equity fund investments605 671 
Debt funds
Other investments276 294 
Investments in qualified affordable housing projects, net (6)1,306 954 
Total non-marketable and other equity securities$2,664 $2,543 
(1)The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and our ownership percentage of each fund at December 31, 2022, and December 31, 2021, (fair value accounting):
 December 31, 2022December 31, 2021
(Dollars in millions)AmountOwnership %AmountOwnership %
Strategic Investors Fund, LP$12.6 %$12.6 %
Capital Preferred Return Fund, LP28 20.0 61 20.0 
Growth Partners, LP24 33.0 67 33.0 
Redwood Evergreen Fund, LP93 100.0 — — 
Total consolidated venture capital and private equity fund investments$147 $130 
(2)The carrying value represents investments in 136 and 150 funds (primarily venture capital funds) at December 31, 2022, and December 31, 2021, respectively, where our ownership interest is typically less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating activities and financial policies. We carry our unconsolidated venture capital and private equity fund investments at fair value based on the fund investments' net asset values per share as obtained from the general partners of the investments. For each fund investment, we adjust the net asset value per share for differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example September 30th for our December 31st consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.
(3)These investments include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted.
The following table shows the carrying amount of other investments without a readily determinable fair value at December 31, 2022, and the amounts recognized in earnings for the year ended December 31, 2022, and on a cumulative basis:
(Dollars in millions)Year ended December 31, 2022Cumulative Adjustments
Measurement alternative:
Carrying value at December 31, 2022$183 
Carrying value adjustments:
Impairment$(23)$(24)
Upward changes for observable prices— 52 
Downward changes for observable prices(6)(11)
(4)Investments classified as other equity securities (fair value accounting) represent shares held in public companies as a result of exercising public equity warrant assets and direct equity investments in public companies held by our consolidated funds. Changes in equity securities measured at fair value are recognized through net income.
(5)The following table shows the carrying value and our ownership percentage of each investment at December 31, 2022, and December 31, 2021 (equity method accounting):
 December 31, 2022December 31, 2021
(Dollars in millions)AmountOwnership %AmountOwnership %
Venture capital and private equity fund investments:
Strategic Investors Fund II, LP$8.6 %$8.6 %
Strategic Investors Fund III, LP12 5.9 25 5.9 
Strategic Investors Fund IV, LP21 5.0 36 5.0 
Strategic Investors Fund V funds58 Various87 Various
CP II, LP (i) 5.1 5.1 
Other venture capital and private equity fund investments511 Various518 Various
 Total venture capital and private equity fund investments$605 $671 
Debt funds:
Gold Hill Capital 2008, LP (ii)$15.5 %$15.5 %
Other debt fundsVariousVarious
Total debt funds$$
Other investments:
SPD Silicon Valley Bank Co., Ltd.$146 50.0 %$154 50.0 %
Other investments130 Various140 Various
Total other investments$276 $294 
(i)Our ownership includes direct ownership interest of 1.3 percent and indirect ownership interest of 3.8 percent through our investments in Strategic Investors Fund II, LP.
(ii)Our ownership includes direct ownership interest of 11.5 percent in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0 percent.
(6)The following table presents the balances of our investments in qualified affordable housing projects and related unfunded commitments included as a component of "other liabilities" on our consolidated balance sheets at December 31, 2022, and December 31, 2021:
December 31,
(Dollars in millions)20222021
Investments in qualified affordable housing projects, net$1,306 $954 
Other liabilities 754 482 
The following table presents other information relating to our investments in qualified affordable housing projects for the years ended 2022, 2021 and 2020:
Year ended December 31,
(Dollars in millions)202220212020
Tax credits and other tax benefits recognized$99 $77 $57 
Amortization expense included in provision for income taxes (i)80 64 44 
(i)All investments are amortized using the proportional amortization method, and amortization expense is included in the provision for income taxes.
The following table presents the net gains and losses on non-marketable and other equity securities in 2022, 2021 and 2020 as recorded in the line item “Gains (losses) on investment securities, net," a component of noninterest income:
 Year ended December 31,
(Dollars in millions)202220212020
Net gains (losses) on non-marketable and other equity securities:
Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments$(101)$71 $32 
Unconsolidated venture capital and private equity fund investments(86)75 60 
Other investments without a readily determinable fair value(26)75 — 
Other equity securities in public companies (fair value accounting)(52)23 105 
Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments(49)474 162 
Debt funds(1)— 
Other investments10 
Total net gains (losses) on non-marketable and other equity securities $(306)$730 $360 
Less: realized net gains (losses) on sales of non-marketable and other equity securities(19)85 24 
Net gains (losses) on non-marketable and other equity securities still held$(287)$645 $336