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INVESTMENT SECURITIES
 6 Months Ended
Jun. 30, 2026
Investments [Abstract]  
INVESTMENT SECURITIES
NOTE 3 — INVESTMENT SECURITIES

The following tables include the amortized cost and fair value of investment securities:

Amortized Cost and Fair Value - Investment Securities
dollars in millions June 30, 2026December 31, 2025
Gross UnrealizedGross Unrealized
Amortized CostGainsLossesFair ValueAmortized CostGainsLossesFair Value
Investment securities available for sale
U.S. Treasury$13,365 $6 $(51)$13,320 $10,624 $50 $(1)$10,673 
Government agency34 — (1)33 44 — (1)43 
Residential mortgage-backed securities17,804 71 (375)17,500 17,683 263 (323)17,623 
Commercial mortgage-backed securities3,145 7 (180)2,972 3,444 28 (173)3,299 
Corporate bonds132 — (4)128 145 — (5)140 
Municipal bonds12 — — 12 12 — — 12 
Other18 — — 18 — — — — 
Total investment securities available for sale$34,510 $84 $(611)$33,983 $31,952 $341 $(503)$31,790 
Investment in marketable equity securities$95 $62 $(1)$156 $83 $44 $— $127 
Investment securities held to maturity
U.S. Treasury$390 $— $(14)$376 $388 $— $(15)$373 
Government agency1,190 — (55)1,135 1,225 — (55)1,170 
Residential mortgage-backed securities4,311 17 (498)3,830 4,450 32 (490)3,992 
Commercial mortgage-backed securities3,279 — (633)2,646 3,337 — (608)2,729 
Supranational securities247 — (21)226 246 — (20)226 
Other1 — — 1 1 — — 1 
Total investment securities held to maturity$9,418 $17 $(1,221)$8,214 $9,647 $32 $(1,188)$8,491 
Total investment securities$44,023 $163 $(1,833)$42,353 $41,682 $417 $(1,691)$40,408 

U.S. Treasury investments include Treasury bills and Notes issued by the U.S. Treasury. Investments in government agency securities represent securities issued by the Small Business Administration (“SBA”), Federal Home Loan Bank (“FHLB”) and other U.S. agencies. Investments in residential and commercial mortgage-backed securities represent securities issued by the Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”). Investments in corporate bonds represent positions in debt securities of other financial institutions. Municipal bonds are revenue bonds. Investments in marketable equity securities represent positions in common stock of publicly traded financial institutions. Investments in supranational securities represent securities issued by the Supranational Entities & Multilateral Development Banks.

The Retained SBA Notes (as defined in Note 9—Variable Interest Entities) totaling $18 million are reported in other investment securities available for sale and include $14 million with a credit rating equivalent of AAA or AA. Refer to Note 1—Significant Accounting Policies and Basis of Presentation for discussion of the accounting policies for Retained Interests. Other investment securities held to maturity include certificates of deposit with financial institutions.

BancShares initially held approximately 354,000 shares of Visa, Inc. (“Visa”) Class B common stock (“Visa Class B common stock”). Effective January 24, 2024, all outstanding shares of Visa Class B common stock were redenominated as Visa Class B-1 common stock (“Visa Class B-1 common stock”) pursuant to Visa’s eighth amended and restated certificate of incorporation. BancShares currently holds approximately 354,000 shares of Visa Class B-1 common stock. Until the resolution of certain litigation, at which time the Visa Class B-1 common stock will convert to publicly traded Visa Class A common stock, or the potential exchange of Visa Class B-1 common stock for other marketable classes of Visa common stock, these shares are only transferable to other stockholders of Visa Class B-1 common stock or certain new denominations of Visa’s former Class B common stock. As a result, there is limited transfer activity in private transactions between buyers and sellers. Given this limited trading activity and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange of Visa Class B-1 common stock for shares of Visa Class A common stock or other marketable classes of Visa common stock, these shares are not considered to have a readily determinable fair value and have no carrying value. BancShares has elected not to participate in any exchange offers pertaining to its shares of Visa Class B-1 common stock, including the exchange offer Visa commenced on April 13, 2026. BancShares continues to monitor the trading activity in Visa Class B-1 common stock, the status of the resolution of certain litigation matters at Visa, and other potential exchange alternatives that would trigger the conversion of the Visa Class B-1 common stock into Visa Class A common stock or other marketable classes of Visa common stock.
Accrued interest receivable for available for sale and held to maturity debt securities was excluded from the estimate for credit losses. At June 30, 2026, accrued interest receivable for available for sale and held to maturity debt securities was $177 million and $19 million, respectively. At December 31, 2025, accrued interest receivable for available for sale and held to maturity debt securities was $157 million and $20 million, respectively. During the three months ended June 30, 2026 and 2025, there was no accrued interest that was deemed uncollectible and written off against interest income.

A security is considered past due once it is 30 days contractually past due under the terms of the agreement. There were no securities past due as of June 30, 2026 or December 31, 2025.

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Residential and commercial mortgage-backed, government agency, and other investment securities are stated separately as they are not due at a single maturity date.

Maturities
dollars in millionsJune 30, 2026December 31, 2025
Amortized CostFair ValueAmortized CostFair Value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less$4,486 $4,489 $4,893 $4,914 
After one through five years8,995 8,945 5,853 5,879 
After five through 10 years16 14 23 20 
After 10 years12 12 12 12 
Government agency34 33 44 43 
Residential mortgage-backed securities17,804 17,500 17,683 17,623 
Commercial mortgage-backed securities3,145 2,972 3,444 3,299 
Other18 18 — — 
Total investment securities available for sale$34,510 $33,983 $31,952 $31,790 
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less$452 $446 $307 $303 
After one through five years1,376 1,292 1,434 1,360 
After five through 10 years— — 119 107 
Residential mortgage-backed securities4,311 3,830 4,450 3,992 
Commercial mortgage-backed securities3,279 2,646 3,337 2,729 
Total investment securities held to maturity$9,418 $8,214 $9,647 $8,491 
The following table presents interest and dividend income on investment securities:

Interest and Dividends on Investment Securities
dollars in millionsThree Months Ended June 30,Six Months Ended June 30,
2026202520262025
Interest income - taxable investment securities (1)
$401 $418 $784 $831 
Dividend income - marketable equity securities— 1 1 2 
Interest on investment securities$401 $419 $785 $833 
(1) Amount includes interest income on securities purchased under agreements to resell.

The following table presents the gross realized gain and loss on sales of investment securities available for sale, and the net realized gain on sale of marketable equity securities:

Realized Gain (Loss) on Sale of Investment Securities, Net
dollars in millionsThree Months Ended June 30,Six Months Ended June 30,
2026202520262025
Gross realized gain on sale of investment securities available for sale$12 $— $12 $1 
Gross realized loss on sale of investment securities available for sale(12)— (12)(2)
Net realized gain (loss) on sale of investment securities available for sale— — — (1)
Net realized gain on sale of marketable equity securities
— — — 1 
Realized gain (loss) on sale of investment securities, net$— $— $— $— 

The following table provides information regarding investment securities available for sale with unrealized losses:

Gross Unrealized Losses on Investment Securities Available For Sale
dollars in millionsJune 30, 2026
Less than 12 months12 months or moreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Investment securities available for sale
U.S. Treasury$9,139 $(51)$— $— $9,139 $(51)
Government agency— — 33 (1)33 (1)
Residential mortgage-backed securities6,898 (49)2,858 (326)9,756 (375)
Commercial mortgage-backed securities665 (3)1,000 (177)1,665 (180)
Corporate bonds8 — 112 (4)120 (4)
Total$16,710 $(103)$4,003 $(508)$20,713 $(611)
December 31, 2025
Less than 12 months12 months or moreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Investment securities available for sale
U.S. Treasury$859 $(1)$— $— $859 $(1)
Government agency— — 43 (1)43 (1)
Residential mortgage-backed securities815 (2)3,292 (321)4,107 (323)
Commercial mortgage-backed securities48 — 1,129 (173)1,177 (173)
Corporate bonds— — 123 (5)123 (5)
Total$1,722 $(3)$4,587 $(500)$6,309 $(503)
As of June 30, 2026, there were 292 investment securities available for sale with continuous unrealized losses for more than 12 months, of which 277 were government sponsored enterprise-issued mortgage-backed securities including GNMA, FHLMC and FNMA, or government agency securities, and the remaining 15 were corporate bonds. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Given the consistently strong credit rating of the U.S. Treasury, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, as of June 30, 2026, no ACL was required. For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. As a result of this analysis, we determined that no ACL was required for investment securities available for sale as of June 30, 2026. We reviewed the underlying credit exposures related to the Retained SBA Notes and determined no ACL was required as of June 30, 2026.

BancShares’ portfolio of held to maturity debt securities consists of mortgage-backed securities issued by government agencies and government sponsored entities including GNMA, FHLMC and FNMA, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. Given the consistently strong credit rating of the U.S. Treasury and the Supranational Entities & Multilateral Development Banks, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, no ACL was required for debt securities held to maturity as of June 30, 2026.

There were no debt securities on nonaccrual status as of June 30, 2026 or December 31, 2025.

Investment securities having an aggregate carrying value of $3.73 billion at June 30, 2026, and $3.89 billion at December 31, 2025, were pledged as collateral to secure public funds on deposit, the Purchase Money Note, certain short-term borrowings, and for other purposes as required by law.
Certain investments held by BancShares are reported in other assets, including FHLB stock and nonmarketable securities without readily determinable fair values that are recorded at cost, investments in qualified affordable housing projects that are accounted for under the proportional amortization method (the “PAM”), and renewable energy tax credit investments that utilize the hypothetical liquidation at book value method (“HLBVM”). Refer to Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K for descriptions of the accounting methodologies.