v3.26.1
Investment Securities
 6 Months Ended
Jun. 30, 2026
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
2. INVESTMENT SECURITIES
The carrying amounts and fair values of investment securities are summarized as follows:
June 30, 2026
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(in millions)
Held-to-maturity
Private label residential MBS$159 $— $(29)$130 
Tax-exempt1,517 2 (152)1,367 
Total HTM securities$1,676 $2 $(181)$1,497 
Available-for-sale debt securities
CLO$3,218 $5 $(2)$3,221 
Commercial MBS issued by GSEs and GNMA523 1 (10)514 
Corporate debt securities229 — (7)222 
Private label residential MBS1,289 — (153)1,136 
Residential MBS issued by GSEs and GNMA7,767 13 (352)7,428 
Tax-exempt860 — (66)794 
U.S. Treasury securities5,583 — (89)5,494 
Other78 — (7)71 
Total AFS debt securities$19,547 $19 $(686)$18,880 
December 31, 2025
Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
(in millions)
Held-to-maturity
Private label residential MBS$165 $— $(28)$137 
Tax-exempt1,419 3 (132)1,290 
Total HTM securities$1,584 $3 $(160)$1,427 
Available-for-sale debt securities
CLO$2,743 $4 $— $2,747 
Commercial MBS issued by GSEs and GNMA638 5 (8)635 
Corporate debt securities308 — (11)297 
Private label residential MBS1,185 2 (148)1,039 
Residential MBS issued by GSEs and GNMA7,489 52 (311)7,230 
Tax-exempt879 — (77)802 
U.S. Treasury securities5,986 31 (47)5,970 
Other75 1 (8)68 
Total AFS debt securities$19,303 $95 $(610)$18,788 
In addition, the Company held equity securities, which primarily consisted of preferred stock and CRA investments, with a fair value of $80 million and $79 million at June 30, 2026 and December 31, 2025, respectively. Unrealized gains of $0.4 million and unrealized losses of $1.3 million on equity securities for the three months ended June 30, 2026 and 2025, respectively, and unrealized losses of $0.4 million and less than $0.1 million on equity securities for the six months ended June 30, 2026 and 2025, respectively, were recognized in earnings as a component of Fair value gain adjustments, net.
Securities with carrying amounts of approximately $8.6 billion and $9.1 billion at June 30, 2026 and December 31, 2025, respectively, were pledged for various purposes as required or permitted by law.
The following tables summarize the Company's AFS debt securities in an unrealized loss position, aggregated by major security type and length of time in a continuous unrealized loss position: 
June 30, 2026
Less Than Twelve MonthsMore Than Twelve MonthsTotal
Gross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair Value
(in millions)
Available-for-sale debt securities
CLO$2 $1,144 $— $— $2 $1,144 
Commercial MBS issued by GSEs and GNMA2 203 8 117 10 320 
Corporate debt securities1 56 6 146 7 202 
Private label residential MBS— — 153 834 153 834 
Residential MBS issued by GSEs and GNMA39 4,098 313 1,327 352 5,425 
Tax-exempt5 58 61 693 66 751 
U.S. Treasury securities89 5,471 — — 89 5,471 
Other— — 7 50 7 50 
Total AFS securities$138 $11,030 $548 $3,167 $686 $14,197 
December 31, 2025
Less Than Twelve MonthsMore Than Twelve MonthsTotal
Gross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair Value
(in millions)
Available-for-sale debt securities
Commercial MBS issued by GSEs and GNMA$— $— $8 $81 $8 $81 
Corporate debt securities1 19 10 226 11 245 
Private label residential MBS— — 148 875 148 875 
Residential MBS issued by GSEs and GNMA— — 311 1,503 311 1,503 
Tax-exempt2 10 75 731 77 741 
U.S. Treasury securities47 1,891 — — 47 1,891 
Other— — 8 56 8 56 
Total AFS securities$50 $1,920 $560 $3,472 $610 $5,392 
The total number of AFS debt securities in an unrealized loss position at June 30, 2026 was 851, compared to 568 at December 31, 2025.
On a quarterly basis, the Company performs an impairment analysis on its AFS debt securities in an unrealized loss position at the end of the period to determine whether credit losses should be recognized on these securities.
Qualitative considerations made by the Company in its impairment analysis are further discussed below.
Government Issued Securities
U.S. Treasury securities and commercial and residential MBS are issued by either government agencies or GSEs. These securities are either explicitly or implicitly guaranteed by the U.S. government, and are highly rated by major rating agencies. Further, principal and interest payments on these securities continue to be made on a timely basis.
Non-Government Issued Securities
Qualitative factors used in the Company's credit loss assessment of its securities not issued and guaranteed by the U.S. government include consideration of any adverse conditions related to a specific security, industry, or geographic region of its securities, any credit ratings below investment grade, the payment structure of the security and the likelihood of the issuer to be able to make payments that increase in the future, and failure of the issuer to make any scheduled principal or interest payments.
For the Company's corporate debt and tax-exempt securities, the Company also considers various metrics of the issuer including days of cash on hand, the ratio of long-term debt to total assets, the net change in cash between reporting periods, and consideration of any breach in covenant requirements. The Company's corporate debt securities are primarily investment grade, issuers continue to make timely principal and interest payments, and the unrealized losses on these security portfolios primarily relate to changes in interest rates and other market conditions not considered to be credit-related. The Company continues to receive timely principal and interest payments on its tax-exempt securities and the majority of these issuers have revenues pledged for payment of debt service prior to payment of other types of expenses.
For the Company's private label residential MBS, which consist of non-agency collateralized mortgage obligations secured by pools of residential mortgage loans, the Company also considers metrics such as securitization risk weight factor, current credit support, whether there were any mortgage principal losses resulting from defaults in payments on the underlying mortgage collateral, and the credit default rate over the last twelve months. These securities primarily carry investment grade credit ratings, principal and interest payments on these securities continue to be made on a timely basis, and credit support for these securities is considered adequate.
The Company's CLO portfolio consists of highly rated securitization tranches, containing pools of medium- to large-sized corporate, high-yield loans. These are variable rate securities that have an investment grade rating of Single-A or better. Unrealized losses on these securities are primarily a function of the differential from the offer price and the valuation mid-market price as well as changes in interest rates.
Unrealized losses on the Company's other securities portfolio primarily relate to taxable municipal and trust preferred securities. The Company is continuing to receive timely principal and interest payments on its taxable municipal securities, these securities continue to be highly rated and the number of days of cash on hand is strong. The Company's trust preferred securities are investment grade and the issuers continue to make timely principal and interest payments.
As of June 30, 2026, there was no ACL on the Company's AFS debt securities and no related activity occurred during the six months then ended. The following table presents a rollforward of the ACL for the three and six months ended June 30, 2025 based on the Company's impairment analysis of AFS debt securities:
Three Months Ended June 30, 2025Six Months Ended June 30, 2025
(in millions)
Balance, beginning of period$0.2 $0.4 
Provision for (recovery of) credit losses0.1 (0.1)
Charge-offs— — 
Recoveries— — 
Balance, end of period$0.3 $0.3 
The credit loss model under ASC 326-20, applicable to HTM debt securities, requires recognition of lifetime expected credit losses through an allowance account at the time the security is purchased. The following table presents a rollforward of the ACL on the Company's HTM tax-exempt debt securities:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(in millions)
Balance, beginning of period$13.4 $11.6 $12.9 $16.4 
Provision for (recovery of) credit losses0.4 — 0.9 (4.8)
Charge-offs— — — — 
Recoveries— — — — 
Balance, end of period$13.8 $11.6 $13.8 $11.6 
No allowance has been recognized on the Company's HTM private label residential MBS as losses are not expected due to the Company holding a senior position in these securities.
Accrued interest receivable on AFS and HTM debt securities totaled $141 million and $6 million at June 30, 2026, respectively, and $135 million and $5 million at December 31, 2025, respectively, and is excluded from the estimate of expected credit losses.
The following tables summarize the carrying amount of the Company’s securities by investment ratings position, which are updated quarterly and used to monitor credit quality of the securities: 
June 30, 2026
AAAAA+ to AA-A+ to A-BBB+ to BBB-BB+ and belowUnratedTotals
(in millions)
Held-to-maturity
Private label residential MBS$— $— $— $— $— $159 $159 
Tax-exempt— — — — — 1,517 1,517 
Total HTM securities (1)$— $— $— $— $— $1,676 $1,676 
Available-for-sale debt securities
CLO$961 $2,208 $— $— $— $52 $3,221 
Commercial MBS issued by GSEs and GNMA1 513 — — — — 514 
Corporate debt securities— 19 59 122 8 14 222 
Private label residential MBS1,110 26 — — — — 1,136 
Residential MBS issued by GSEs and GNMA— 7,428 — — — — 7,428 
Tax-exempt55 349 328 — — 62 794 
U.S. Treasury securities— 5,494 — — — — 5,494 
Other— 9 2 29 10 21 71 
Total AFS securities (1)$2,127 $16,046 $389 $151 $18 $149 $18,880 
Equity securities
CRA investments$— $28 $— $— $— $— $28 
Preferred stock— — — 21 30 1 52 
Total equity securities (1)$— $28 $— $21 $30 $1 $80 
(1)For rated securities where ratings differ, the Company uses an average of the available ratings by major credit agencies.
December 31, 2025
AAAAA+ to AA-A+ to A-BBB+ to BBB-BB+ and belowUnratedTotals
(in millions)
Held-to-maturity
Private label residential MBS$— $— $— $— $— $165 $165 
Tax-exempt— — — — — 1,419 1,419 
Total HTM securities (1)$— $— $— $— $— $1,584 $1,584 
Available-for-sale debt securities
CLO$739 $1,857 $151 $— $— $— $2,747 
Commercial MBS issued by GSEs and GNMA1 634 — — — — 635 
Corporate debt securities— — 78 138 81 — 297 
Private label residential MBS1,012 26 — — 1 — 1,039 
Residential MBS issued by GSEs and GNMA— 7,230 — — — — 7,230 
Tax-exempt8 362 361 — — 71 802 
U.S. Treasury securities— 5,970 — — — — 5,970 
Other— 11 3 28 10 16 68 
Total AFS securities (1)$1,760 $16,090 $593 $166 $92 $87 $18,788 
Equity securities
CRA investments$— $27 $— $— $— $— $27 
Preferred stock— — — 21 30 1 52 
Total equity securities (1)$— $27 $— $21 $30 $1 $79 
(1)For rated securities where ratings differ, the Company uses an average of the available ratings by major credit agencies.
A security is considered to be past due once it is 30 days contractually past due under the terms of the agreement. As of June 30, 2026, the Company did not have a significant amount of investment securities that were past due or on nonaccrual status.
The amortized cost and fair value of the Company's debt securities as of June 30, 2026, by contractual maturities are shown below. MBS are shown separately as individual MBS are comprised of pools of loans with varying maturities.
June 30, 2026
Amortized CostEstimated Fair Value
(in millions)
Held-to-maturity
Due in one year or less$18 $18 
After one year through five years30 31 
After five years through ten years180 172 
After ten years1,289 1,146 
Mortgage-backed securities159 130 
Total HTM securities$1,676 $1,497 
Available-for-sale
Due in one year or less$850 $847 
After one year through five years1,462 1,450 
After five years through ten years469 467 
After ten years7,187 7,038 
Mortgage-backed securities9,579 9,078 
Total AFS securities$19,547 $18,880 
The following table presents gross gains and losses on sales of investment securities:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(in millions)
Available-for-sale securities
Gross gains$1.4 $11.8 $59.0 $13.9 
Gross losses— — (7.1)— 
Net gain on AFS securities$1.4 $11.8 $51.9 $13.9 
Equity securities
Gross gains $1.6 $0.2 $1.6 $0.2 
Gross losses— (0.6)— (0.6)
Net gain (loss) on equity securities$1.6 $(0.4)$1.6 $(0.4)
During the three and six months ended June 30, 2026, the Company sold AFS securities with a carrying value of $583 million and $7.1 billion, respectively, and recognized a net gain of $1.4 million and $51.9 million, respectively, as U.S. Treasury securities and MBS were sold to secure gains, including hedged U.S. Treasury securities sold as part of interest rate swap terminations that resulted in an $18.7 million gain. During the three and six months ended June 30, 2025, the Company sold AFS securities with a carrying value of $2.4 billion and $2.8 billion, respectively, and recognized a net gain of $11.8 million and $13.9 million, respectively, as U.S. Treasury securities and MBS were sold to secure gains, including hedged U.S. Treasury securities sold as part of an interest rate swap termination that resulted in a $7.7 million gain. See "Note 12. Derivatives and Hedging Activities" for further discussion of terminated interest rate swaps.