v3.25.2
FAIR VALUE
 9 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
Our “Financial instruments” and “Financial instrument liabilities” on our Condensed Consolidated Statements of Financial Condition are recorded at fair value. See Notes 2 and 4 of our 2024 Form 10-K for further information about such instruments and our significant accounting policies related to fair value. The following tables present assets and liabilities measured at fair value on a recurring basis.
$ in millionsLevel 1Level 2Level 3 
Netting
adjustments (1)
Balance as of June 30, 2025
Assets at fair value on a recurring basis:
    
Trading assets:     
Municipal and provincial obligations$10 $298 $— $— $308 
Corporate obligations15 628 — — 643 
Government and agency obligations28 119 — — 147 
Agency mortgage-backed securities (“MBS”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABS”)— 171 — — 171 
Non-agency CMOs and ABS— 39 — — 39 
Total debt securities53 1,255 — — 1,308 
Equity securities8 5 — — 13 
Brokered certificates of deposit— 26 — — 26 
Other— — 2 — 2 
Total trading assets61 1,286 2 — 1,349 
Available-for-sale securities (2)
432 6,733 — — 7,165 
Derivative assets:
Interest rate
11 322 — (261)72 
Other— — 1 — 1 
Total derivative assets11 322 1 (261)73 
All other investments:
Government and agency obligations (3)
91 — — — 91 
Other106 1 7 — 114 
Total all other investments197 1 7 — 205 
Other assets - client-owned fractional shares155 — — — 155 
Subtotal856 8,342 10 (261)8,947 
Other investments - private equity - measured at net asset value (“NAV”)110 
Total assets at fair value on a recurring basis$856 $8,342 $10 $(261)$9,057 
Liabilities at fair value on a recurring basis:
Trading liabilities:
Municipal and provincial obligations$2 $— $— $— $2 
Corporate obligations— 616 — — 616 
Government and agency obligations153 — — — 153 
Agency MBS and CMOs
— 25 — — 25 
Total debt securities155 641 — — 796 
Equity securities124 — — — 124 
Total trading liabilities279 641 — — 920 
Derivative liabilities:
Interest rate11 327 — (131)207 
Foreign exchange— 3 — — 3 
Total derivative liabilities11 330 — (131)210 
Other payables - repurchase liabilities related to client-owned fractional shares155 — — — 155 
Total liabilities at fair value on a recurring basis $445 $971 $— $(131)$1,285 
$ in millionsLevel 1Level 2Level 3 
Netting
adjustments (1)
Balance as of September 30, 2024
Assets at fair value on a recurring basis:
    
Trading assets:    
Municipal and provincial obligations
$2 $304 $— $— $306 
Corporate obligations
12 630 — — 642 
Government and agency obligations
49 144 — — 193 
Agency MBS, CMOs, and ABS— 205 — — 205 
Non-agency CMOs and ABS— 95 — — 95 
Total debt securities
63 1,378 — — 1,441 
Equity securities
14 2 — — 16 
Brokered certificates of deposit
— 20 — — 20 
Other
— — 3 — 3 
Total trading assets77 1,400 3 — 1,480 
Available-for-sale securities (2)
704 7,556 — — 8,260 
Derivative assets:
Interest rate3 335 — (246)92 
Foreign exchange— 7 — — 7 
Other
— — 4 — 4 
Total derivative assets3 342 4 (246)103 
All other investments:
Government and agency obligations (3)
91 — — — 91 
Other101 1 7 — 109 
Total all other investments192 1 7 — 200 
Other assets - client-owned fractional shares133 — — — 133 
Subtotal
1,109 9,299 14 (246)10,176 
Other investments - private equity - measured at NAV
102 
Total assets at fair value on a recurring basis
$1,109 $9,299 $14 $(246)$10,278 
Liabilities at fair value on a recurring basis:
Trading liabilities:
Municipal and provincial obligations$5 $— $— $— $5 
Corporate obligations— 598 — — 598 
Government and agency obligations243 6 — — 249 
Agency MBS and CMOs
— 26 — — 26 
Total debt securities248 630 — — 878 
Equity securities
97 1 — — 98 
Total trading liabilities345 631 — — 976 
Derivative liabilities:
Interest rate3 343 — (123)223 
Foreign exchange
— 1 — — 1 
Total derivative liabilities3 344 — (123)224 
Other payables - repurchase liabilities related to client-owned fractional shares133 — — — 133 
Total liabilities at fair value on a recurring basis
$481 $975 $— $(123)$1,333 

(1)Netting adjustments represent the impact of counterparty and collateral netting on our derivative balances included on our Condensed Consolidated Statements of Financial Condition. See Note 5 for additional information.
(2)Our available-for-sale securities primarily consist of agency MBS, agency CMOs, and U.S. Treasury securities (“U.S. Treasuries”). See Note 4 for further information.
(3)These assets are primarily comprised of U.S. Treasuries purchased to meet certain deposit requirements with clearing organizations.
Level 3 recurring fair value measurements

The following tables present the changes in fair value for Level 3 assets and liabilities measured at fair value on a recurring basis. The realized and unrealized gains and losses in the tables may include changes in fair value that were attributable to both observable and unobservable inputs. In the following tables, gains/(losses) on trading and derivative instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues on our Condensed Consolidated Statements of Income and Comprehensive Income.
Three months ended June 30, 2025
Level 3 instruments at fair value
Financial assets
Trading assets
Derivative assets
Other investments
$ in millionsOther
Other
All other
Fair value beginning of period
$1 $6 $7 
Total gains/(losses) included in earnings1 (5)— 
Purchases and contributions
27 — — 
Sales and distributions(27)— — 
Transfers:
  
Into Level 3— — — 
Out of Level 3— — — 
Fair value end of period
$2 $1 $7 
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
$— $(5)$— 

Nine months ended June 30, 2025
Level 3 instruments at fair value
Financial assets
Trading assetsDerivative assetsOther investments
$ in millionsOtherOtherAll other
Fair value beginning of period
$3 $4 $7 
Total gains/(losses) included in earnings
2 (3)— 
Purchases and contributions
66 — — 
Sales and distributions(69)— — 
Transfers:
Into Level 3— — — 
Out of Level 3— — — 
Fair value end of period
$2 $1 $7 
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
$— $(2)$— 
Three months ended June 30, 2024
Level 3 instruments at fair value
Financial assets
 Trading assetsOther investments
$ in millionsOtherAll other
Fair value beginning of period
$4 $29 
Total gains/(losses) included in earnings— — 
Purchases and contributions
31 — 
Sales and distributions
(22)— 
Transfers:
Into Level 3— — 
Out of Level 3— — 
Fair value end of period
$13 $29 
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
$(1)$— 
Nine months ended June 30, 2024
Level 3 instruments at fair value
Financial assets
Trading assetsOther investments
$ in millionsOtherAll other
Fair value beginning of period
$4 $30 
Total gains/(losses) included in earnings
— (1)
Purchases and contributions
60 — 
Sales and distributions
(51)— 
Transfers:
Into Level 3— — 
Out of Level 3— — 
Fair value end of period
$13 $29 
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
$(1)$— 

As of June 30, 2025, 11% of our assets and 2% of our liabilities were measured at fair value on a recurring basis. As of September 30, 2024, 12% of our assets and 2% of our liabilities were measured at fair value on a recurring basis. As of both June 30, 2025 and September 30, 2024, Level 3 assets represented less than 1% of our assets measured at fair value on a recurring basis.

Investments in private equity measured at net asset value per share

As more fully described in Note 2 of our 2024 Form 10-K, as a practical expedient, we utilize NAV or its equivalent to determine the recorded value of a portion of our private equity investments portfolio. We utilize NAV when the fund investment does not have a readily determinable fair value and the NAV of the fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the investments at fair value.

Our private equity portfolio as of June 30, 2025 primarily included investments in third-party funds, including growth equity, venture capital, and mezzanine lending fund investments. Our investments cannot be redeemed directly with the funds. Our investments are monetized through the liquidation of underlying assets of fund investments, the timing of which is uncertain.

The following table presents the recorded value and unfunded commitments related to our private equity investments portfolio.
$ in millionsRecorded valueUnfunded commitment
June 30, 2025
Private equity investments measured at NAV$110 $31 
Private equity investments not measured at NAV7 
Total private equity investments
$117 
September 30, 2024
Private equity investments measured at NAV$102 $26 
Private equity investments not measured at NAV7 
Total private equity investments$109 
Financial instruments measured at fair value on a nonrecurring basis

The following table presents assets measured at fair value on a nonrecurring basis along with the valuation techniques and significant unobservable inputs used in the valuation of the assets classified as level 3. These inputs represent those that a market participant would take into account when pricing these instruments. Weighted averages are calculated by weighting each input by the relative fair value of the related financial instrument.
$ in millionsLevel 2Level 3Total fair valueValuation technique(s)Unobservable inputRange
(weighted-average)
June 30, 2025
Bank loans:
Residential mortgage loans$2 $7 $9 
Collateral or
discounted cash flow (1)
Prepayment rate
7 yrs. - 12 yrs. (10.5 yrs.)
Corporate loans$— $132 $132 
Collateral or
 discounted cash flow (1)
Recovery rate
35% - 35% (35%)
Loans held for sale$38 $— $38 
N/A (2)
N/AN/A
September 30, 2024
Bank loans:
Residential mortgage loans$2 $7 $9 
Collateral or
discounted cash flow (1)
Prepayment rate
7 yrs. - 12 yrs. (10.5 yrs.)
Corporate loans$— $106 $106 
Collateral or
 discounted cash flow (1)
Recovery rate
0% - 37% (37%)

(1)The valuation techniques used to estimate the fair values are based on collateral value less selling costs for the collateral-dependent loans and discounted cash flows for loans that are not collateral-dependent. Unobservable inputs used in the collateral valuation technique are not meaningful and unobservable inputs used in the discounted cash flow valuation technique are presented in the table.
(2)See the “Bank loans, net - Loans held for sale” section of Note 2 of our 2024 Form 10-K for information on the valuation techniques used in the valuation of our loans held for sale measured at fair value on a nonrecurring basis.

Financial instruments not recorded at fair value

Many, but not all, of the financial instruments we hold were recorded at fair value on the Condensed Consolidated Statements of Financial Condition. The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value on the Condensed Consolidated Statements of Financial Condition at June 30, 2025 and September 30, 2024. This table excludes financial instruments that are carried at amounts which approximate fair value. See Note 4 of our 2024 Form 10-K for a discussion of our financial instruments that are not recorded at fair value.
$ in millionsLevel 2Level 3Total estimated fair valueCarrying amount
June 30, 2025
Financial assets:
    
Bank loans, net
$217 $48,906 $49,123 $49,661 
Financial liabilities:
 
Bank deposits - certificates of deposit$1,788 $— $1,788 $1,785 
Other borrowings - subordinated notes payable$98 $— $98 $99 
Senior notes payable$1,774 $— $1,774 $2,040 
September 30, 2024
Financial assets:
Bank loans, net
$183 $45,002 $45,185 $45,879 
Financial liabilities:
 
Bank deposits - certificates of deposit$2,623 $— $2,623 $2,612 
Other borrowings - subordinated notes payable$97 $— $97 $99 
Senior notes payable$1,874 $— $1,874 $2,040