Investment Securities

The amortized cost, gross unrealized gains and losses, and fair value of AFS and HTM securities are as follows:



June 30, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale securities:
U.S. agency mortgage-backed securities	$	22,977	$	50	$	80	$	22,947
U.S. Treasury securities	11,012		—		153		10,859
Asset-backed securities ⁽¹⁾	10,710		20		10		10,720
Corporate debt securities ⁽²⁾	6,187		11		7		6,191
Certificates of deposit	2,690		3		1		2,692
U.S. agency notes	1,530		—		6		1,524
Commercial paper ⁽²⁾	505		—		—		505
Foreign government agency securities	50		—		2		48
Non-agency commercial mortgage-backed securities	36		—		—		36
Total available for sale securities	$	55,697	$	84	$	259	$	55,522
Held to maturity securities:
U.S. agency mortgage-backed securities	$	113,106	$	55	$	2,907	$	110,254
Asset-backed securities ⁽¹⁾	16,356		125		10		16,471
Corporate debt securities ⁽²⁾	4,550		9		55		4,504
U.S. state and municipal securities	1,242		18		3		1,257
Non-agency commercial mortgage-backed securities	1,065		2		23		1,044
U.S. Treasury securities	223		—		9		214
Certificates of deposit	200		—		—		200
Foreign government agency securities	50		—		2		48
Total held to maturity securities	$	136,792	$	209	$	3,009	$	133,992



December 31, 2017
Available for sale securities:
U.S. agency mortgage-backed securities	$	20,915	$	53	$	39	$	20,929
U.S. Treasury securities	9,583		—		83		9,500
Asset-backed securities ⁽¹⁾	9,019		34		6		9,047
Corporate debt securities ⁽²⁾	6,154		16		1		6,169
Certificates of deposit	2,040		2		1		2,041
U.S. agency notes	1,914		—		8		1,906
Commercial paper ⁽²⁾	313		—		—		313
Foreign government agency securities	51		—		1		50
Non-agency commercial mortgage-backed securities	40		—		—		40
Total available for sale securities	$	50,029	$	105	$	139	$	49,995
Held to maturity securities:
U.S. agency mortgage-backed securities	$	101,197	$	290	$	1,034	$	100,453
Asset-backed securities ⁽¹⁾	12,937		127		2		13,062
Corporate debt securities ⁽²⁾	4,078		13		5		4,086
U.S. state and municipal securities	1,247		57		—		1,304
Non-agency commercial mortgage-backed securities	994		10		5		999
U.S. Treasury securities	223		—		3		220
Certificates of deposit	200		—		—		200
Foreign government agency securities	50		—		1		49
Total held to maturity securities	$	120,926	$	497	$	1,050	$	120,373

⁽¹⁾Approximately 36% and 42% of asset-backed securities held as of June 30, 2018 and December 31, 2017, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 46% and 40% of the asset-backed securities held as of June 30, 2018 and December 31, 2017, respectively.

⁽²⁾As of June 30, 2018 and December 31, 2017, approximately 35% and 41%, respectively, of the total AFS and HTM investments in corporate debt securities and commercial paper were issued by institutions in the financial services industry. Approximately 21% and 22% of the holdings of these securities were issued by institutions in the information technology industry as of June 30, 2018 and December 31, 2017, respectively.

At June 30, 2018, CSB had pledged securities with a fair value of $21.9 billion as collateral to secure borrowing capacity on a secured credit facility with the FHLB (see Note 8). CSB also pledges certain investment securities as collateral to secure borrowing capacity at the Federal Reserve Bank discount window, and had pledged securities with a fair value of $2.5 billion as collateral for this facility at June 30, 2018. CSB also pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $900 million at June 30, 2018.

Securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows:



	Less than				12 months
	12 months				or longer				Total
June 30, 2018	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale securities:
U.S. agency mortgage-backed securities	$	7,861	$	68	$	1,732	$	12	$	9,593	$	80
U.S. Treasury securities	5,639		62		4,556		91		10,195		153
Asset-backed securities	2,495		7		348		3		2,843		10
Corporate debt securities	2,163		7		20		—		2,183		7
Certificates of deposit	549		1		—		—		549		1
U.S. agency notes	195		—		1,114		6		1,309		6
Foreign government agency securities	49		2		—		—		49		2
Total	$	18,951	$	147	$	7,770	$	112	$	26,721	$	259
Held to maturity securities:
U.S. agency mortgage-backed securities	$	68,494	$	1,539	$	24,984	$	1,368	$	93,478	$	2,907
Asset-backed securities	2,097		10		25		—		2,122		10
Corporate debt securities	2,637		55		—		—		2,637		55
U.S. state and municipal securities	118		3		—		—		118		3
Non-agency commercial mortgage-backed securities	902		23		—		—		902		23
U.S. Treasury securities	214		9		—		—		214		9
Foreign government agency securities	48		2		—		—		48		2
Total	$	74,510	$	1,641	$	25,009	$	1,368	$	99,519	$	3,009
Total securities with unrealized losses ⁽¹⁾	$	93,461	$	1,788	$	32,779	$	1,480	$	126,240	$	3,268



December 31, 2017
Available for sale securities:
U.S. agency mortgage-backed securities	$	5,696	$	21	$	2,548	$	18	$	8,244	$	39
U.S. Treasury securities	4,625		11		4,875		72		9,500		83
Asset-backed securities	904		3		424		3		1,328		6
Corporate debt securities	736		1		120		—		856		1
Certificates of deposit	799		1		—		—		799		1
U.S. agency notes	99		—		1,807		8		1,906		8
Foreign government agency securities	50		1		—		—		50		1
Total	$	12,909	$	38	$	9,774	$	101	$	22,683	$	139
Held to maturity securities:
U.S. agency mortgage-backed securities	$	42,102	$	310	$	24,753	$	724	$	66,855	$	1,034
Asset-backed securities	1,124		2		72		—		1,196		2
Corporate debt securities	1,078		5		—		—		1,078		5
Non-agency commercial mortgage-backed securities	607		5		—		—		607		5
U.S. Treasury securities	220		3		—		—		220		3
Foreign government agency securities	49		1		—		—		49		1
Total	$	45,180	$	326	$	24,825	$	724	$	70,005	$	1,050
Total securities with unrealized losses ⁽²⁾	$	58,089	$	364	$	34,599	$	825	$	92,688	$	1,189

⁽¹⁾The number of investment positions with unrealized losses totaled 332 for AFS securities and 1,543 for HTM securities.

⁽²⁾The number of investment positions with unrealized losses totaled 251 for AFS securities and 938 for HTM securities.

At June 30, 2018, substantially all securities in the investment portfolios were rated investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government or U.S. government-sponsored enterprises.

Management evaluates whether investment securities are other-than-temporarily impaired (OTTI) on a quarterly basis as described in Note 2 in the 2017 Form 10-K. No amounts were recognized as OTTI in earnings or other comprehensive income in 2018 or 2017. As of June 30, 2018 and December 31, 2017, Schwab did not hold any securities on which OTTI was previously recognized.

The maturities of AFS and HTM securities are as follows:



June 30, 2018	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Available for sale securities:
U.S. agency mortgage-backed securities ⁽¹⁾	$	93	$	3,664	$	9,498	$	9,692	$	22,947
U.S. Treasury securities	3,194		7,665		—		—		10,859
Asset-backed securities	250		8,909		1,006		555		10,720
Corporate debt securities	2,253		3,938		—		—		6,191
Certificates of deposit	672		2,020		—		—		2,692
U.S. agency notes	861		663		—		—		1,524
Commercial paper	505		—		—		—		505
Foreign government agency securities	—		48		—		—		48
Non-agency commercial mortgage-backed securities ⁽¹⁾	—		—		—		36		36
Total fair value	$	7,828	$	26,907	$	10,504	$	10,283	$	55,522
Total amortized cost	$	7,836	$	27,038	$	10,533	$	10,290	$	55,697
Held to maturity securities:
U.S. agency mortgage-backed securities ⁽¹⁾	$	322	$	13,730	$	31,739	$	64,463	$	110,254
Asset-backed securities	—		1,083		8,978		6,410		16,471
Corporate debt securities	393		3,543		568		—		4,504
U.S. state and municipal securities	—		—		180		1,077		1,257
Non-agency commercial mortgage-backed securities ⁽¹⁾	—		354		—		690		1,044
U.S. Treasury securities	—		—		214		—		214
Certificates of deposit	—		200		—		—		200
Foreign government agency securities	—		48		—		—		48
Total fair value	$	715	$	18,958	$	41,679	$	72,640	$	133,992
Total amortized cost	$	716	$	19,252	$	42,448	$	74,376	$	136,792

⁽¹⁾ Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and gross realized gains and losses from sales of AFS securities are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Proceeds	$	115	$	4,421	$	115	$	5,485
Gross realized gains	—		6		—		7