Annual report pursuant to Section 13 and 15(d)

Fair Value of Financial Instruments

v3.24.0.1
Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Financial instruments are classified within the fair value hierarchy using the methodologies described in Note 20 – Fair Value Measurements. Certain loans, deposits, long-term debt, unfunded lending commitments and other financial instruments are accounted for under the fair value option. For more information, see Note 21 – Fair Value Option. The following disclosures include financial instruments that are not carried at fair value or only a portion of the ending balance is carried at fair value on the Consolidated Balance Sheet.
Short-term Financial Instruments
The carrying value of short-term financial instruments, including cash and cash equivalents, certain time deposits placed and other short-term investments, federal funds sold and purchased, certain resale and repurchase agreements and short-term borrowings, approximates the fair value of these instruments. These financial instruments generally expose the Corporation to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The Corporation accounts for certain resale and repurchase agreements under the fair value option.
Under the fair value hierarchy, cash and cash equivalents are classified as Level 1. Time deposits placed and other short-term investments, such as U.S. government securities and short-term commercial paper, are classified as Level 1 or Level 2. Federal funds sold and purchased are classified as Level 2. Resale and repurchase agreements are classified as Level 2 because they are generally short-dated and/or variable-rate instruments collateralized by U.S. government or agency securities. Short-term borrowings are generally classified as Level 2.
Fair Value of Financial Instruments
The carrying values and fair values by fair value hierarchy of certain financial instruments where only a portion of the ending balance was carried at fair value at December 31, 2023 and 2022 are presented in the table below.
Fair Value of Financial Instruments
Fair Value
Carrying Value Level 2 Level 3 Total
(Dollars in millions) December 31, 2023
Financial assets
Loans
$ 1,020,281  $ 49,311  $ 949,977  $ 999,288 
Loans held-for-sale 6,002  3,024  2,979  6,003 
Financial liabilities
Deposits (1)
1,923,827  1,925,015    1,925,015 
Long-term debt 302,204  303,070  913  303,983 
Commercial unfunded lending commitments (2)
1,275  44  3,927  3,971 
December 31, 2022
Financial assets
Loans
$ 1,014,593  $ 50,194  $ 935,282  $ 985,476 
Loans held-for-sale 6,871  3,417  3,455  6,872 
Financial liabilities
Deposits (1)
1,930,341  1,930,165  —  1,930,165 
Long-term debt 275,982  271,993  1,136  273,129 
Commercial unfunded lending commitments (2)
1,650  77  6,596  6,673 
(1)    Includes demand deposits of $897.3 billion and $918.9 billion with no stated maturities at December 31, 2023 and 2022.
(2)    The carrying value of commercial unfunded lending commitments is included in accrued expenses and other liabilities on the Consolidated Balance Sheet. The Corporation does not estimate the fair value of consumer unfunded lending commitments because, in many instances, the Corporation can reduce or cancel these commitments by providing notice to the borrower. For more information on commitments, see Note 12 – Commitments and Contingencies.