4. Securities

The following table provides the amortized cost, fair value and unrealized gains and losses for the major categories of the available-for-sale and held-to-maturity securities portfolios as of:


	Amortized		Unrealized		Unrealized			Fair
June 30, 2011 ($ in millions)	Cost		Gains		Losses			Value
Available-for-sale and other:
U.S. Treasury and government agencies	$	199		7		—			206
U.S. Government sponsored agencies		2,141		118		—			2,259
Obligations of states and political subdivisions		113		2		—			115
Agency mortgage-backed securities		10,269		475		(4	)		10,740
Other bonds, notes and debentures		1,135		17		(6	)		1,146
Other securities^(a)		1,032		4		—			1,036

Total	$	14,889		623		(10	)		15,502

Held-to-maturity:
Obligations of states and political subdivisions	$	340		—		—			340
Other debt securities		4		—		—			4

Total	$	344		—		—			344


	Amortized		Unrealized		Unrealized			Fair
December 31, 2010 ($ in millions)	Cost		Gains		Losses			Value
Available-for-sale and other:
U.S. Treasury and government agencies	$	225		5		—			230
U.S. Government sponsored agencies		1,564		81		—			1,645
Obligations of states and political subdivisions		170		2		—			172
Agency mortgage-backed securities		10,570		435		(32	)		10,973
Other bonds, notes and debentures		1,338		19		(15	)		1,342
Other securities^(a)		1,052		—		—			1,052

Total	$	14,919		542		(47	)		15,414

Held-to-maturity:
Obligations of states and political subdivisions	$	348		—		—			348
Other debt securities		5		—		—			5

Total	$	353		—		—			353


	Amortized		Unrealized		Unrealized			Fair
June 30, 2010 ($ in millions)	Cost		Gains		Losses			Value
Available-for-sale and other:
U.S. Treasury and government agencies	$	475		7		—			482
U.S. Government sponsored agencies		1,692		104		—			1,796
Obligations of states and political subdivisions		196		3		—			199
Agency mortgage-backed securities		10,109		539		(1	)		10,647
Other bonds, notes and debentures		946		28		(15	)		959
Other securities^(a)		1,938		—		—			1,938

Total	$	15,356		681		(16	)		16,021

Held-to-maturity:
Obligations of states and political subdivisions	$	349		—		—			349
Other debt securities		5		—		—			5

Total	$	354		—		—			354

(a)

Other securities consist of FHLB and FRB restricted stock holdings of $497 and $344, respectively at June 30, 2011, $524 and $344, respectively at December 31, 2010, and $551 and $343, respectively, at June 30, 2010, that are carried at cost, and certain mutual fund and equity security holdings.

The following table presents realized gains and losses that were recognized in income from available-for-sale securities:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in millions)	2011		2010		2011		2010
Realized gains	$	5		11		17		27
Realized losses		—		—		—		(4	)

Net realized gains	$	5		11		17		23

Trading securities totaled $217 million as of June 30, 2011, compared to $294 million at December 31, 2010 and $270 million at June 30, 2010. Gross realized gains on trading securities were immaterial for the three months ending June 30, 2011 and June 30, 2010, $1 million for the six months ended June 30, 2011, and immaterial for the six months ended June 30, 2010. Gross realized losses were immaterial for the three months ended June 30, 2011 and June 30, 2010 and $1 million for the six months ended June 30, 2011 and June 30, 2010. Gross unrealized gains on trading securities were $2 million at June 30, 2011 and December 31, 2010, and immaterial at June 30, 2010. Gross unrealized losses on trading securities were $4 million at June 30, 2011, $8 million at December 31, 2010, and $14 million at June 30, 2010.

At June 30, 2011, December 31, 2010, and June 30, 2010, securities with a fair value of $10.8 billion, $11.3 billion, and $12.5 billion, respectively, were pledged to secure borrowings, public deposits, trust funds, derivative contracts and for other purposes as required or permitted by law.

The amortized cost and fair value of available-for-sale and held-to-maturity securities at June 30, 2011, by contractual maturity, are shown in the following table:


	Available-for-Sale & Other				Held-to-Maturity
($ in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Debt securities:^(a)
Under 1 year	$	508		517		29		29
1-5 years		8,611		9,041		242		242
5-10 years		4,528		4,694		50		50
Over 10 years		210		214		23		23
Other securities		1,032		1,036		—		—

Total	$	14,889		15,502		344		344

(a)	Actual maturities may differ from contractual maturities when there exists a right to call or prepay obligations with or without call or prepayment penalties.

The following table provides the fair value and gross unrealized losses on available-for-sale securities in an unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of:


	Less than 12 months					12 months or more					Total
			Unrealized					Unrealized					Unrealized
($ in millions)	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
June 30, 2011
U.S. Treasury and government agencies	$	—		—			—		—			—		—
U.S. Government sponsored agencies		—		—			—		—			—		—
Obligations of states and political subdivisions		—		—			3		—			3		—
Agency mortgage-backed securities		606		(4	)		—		—			606		(4	)
Other bonds, notes and debentures		324		(3	)		37		(3	)		361		(6	)
Other securities		—		—			—		—			—		—

Total	$	930		(7	)		40		(3	)		970		(10	)


December 31, 2010
U.S. Treasury and government agencies	$	—		—			1		—			1		—
U.S. Government sponsored agencies		—		—			—		—			—		—
Obligations of states and political subdivisions		11		—			4		—			15		—
Agency mortgage-backed securities		1,555		(32	)		—		—			1,555		(32	)
Other bonds, notes and debentures		563		(10	)		47		(5	)		610		(15	)
Other securities		—		—			—		—			—		—

Total	$	2,129		(42	)		52		(5	)		2,181		(47	)


June 30, 2010
U.S. Treasury and government agencies	$	150		—			1		—			151		—
U.S. Government sponsored agencies		—		—			—		—			—		—
Obligations of states and political subdivisions		2		—			3		—			5		—
Agency mortgage-backed securities		114		(1	)		—		—			114		(1	)
Other bonds, notes and debentures		60		(6	)		60		(9	)		120		(15	)
Other securities		—		—			—		—			—		—

Total	$	326		(7	)		64		(9	)		390		(16	)

Other-Than-Temporary Impairments

If the fair value of an available-for-sale or held-to-maturity security is less than its amortized cost basis, the Bancorp must determine whether an OTTI has occurred. Under U.S. GAAP, the recognition and measurement requirements related to OTTI differ for debt and equity securities.

For debt securities, if the Bancorp intends to sell the debt security or will more likely than not be required to sell the debt security before recovery of the entire amortized cost basis, then an OTTI has occurred and the Bancorp must recognize through earnings the entire OTTI, which is calculated as the difference between the fair value of the debt security and its amortized cost basis. However, even if the Bancorp does not intend to sell the debt security and will not likely be required to sell the debt security before recovery of its entire amortized cost basis, the Bancorp must evaluate expected cash flows to be received and determine if a credit loss has occurred. In the event of a credit loss, the credit component of the impairment is recognized within noninterest income and the non-credit component is recognized through accumulated other comprehensive income. During the six months ended June 30, 2011, the Bancorp recognized an immaterial amount of OTTI on its available-for-sale debt securities and no OTTI was recognized on held-to-maturity debt securities. During the six months ended 2010, the Bancorp did not recognize OTTI on any of its available-for-sale or held-to-maturity debt securities. Additionally, at June 30, 2011 an immaterial amount of unrealized losses in the available-for-sale securities portfolio were represented by non-rated securities, compared to approximately one percent at December 31, 2010 and June 30, 2010.

For equity securities, the Bancorp’s management evaluates the securities in an unrealized loss position in the available-for-sale portfolio for OTTI on the basis of the duration of the decline in value of the security and severity of that decline as well as the Bancorp’s intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in the fair value. If it is determined that the impairment on an equity security is other than temporary, an impairment loss equal to the difference between the carrying value of the security and its fair value is recognized within noninterest income in the Condensed Consolidated Statements of Income. During the six months ended June 30, 2011 and 2010, the Bancorp did not recognize OTTI on any of its available-for-sale equity securities.