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SECURITIES
 9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
SECURITIES SECURITIES
The amortized cost and fair value of debt securities are as follows:
TABLE 3.1
 
(in millions)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
 Value
Debt Securities Available for Sale:
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
U.S. government agencies
$
159

 
$
1

 
$
(1
)
 
$
159

U.S. government-sponsored entities
245

 
1

 
(1
)
 
245

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,337

 
5

 
(4
)
 
1,338

Agency collateralized mortgage obligations
1,178

 
13

 
(3
)
 
1,188

Commercial mortgage-backed securities
309

 
8

 
(1
)
 
316

States of the U.S. and political subdivisions
14

 
—

 
—

 
14

Other debt securities
2

 
—

 
—

 
2

Total debt securities available for sale
$
3,244

 
$
28

 
$
(10
)
 
$
3,262

December 31, 2018
 
 
 
 
 
 
 
U.S. government agencies
$
188

 
$
—

 
$
(1
)
 
$
187

U.S. government-sponsored entities
317

 
—

 
(4
)
 
313

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,465

 
—

 
(36
)
 
1,429

Agency collateralized mortgage obligations
1,179

 
5

 
(23
)
 
1,161

Commercial mortgage-backed securities
229

 
—

 
(1
)
 
228

States of the U.S. and political subdivisions
21

 
—

 
—

 
21

Other debt securities
2

 
—

 
—

 
2

Total debt securities available for sale
$
3,401

 
$
5

 
$
(65
)
 
$
3,341


(in millions)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
 Value
Debt Securities Held to Maturity:
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
U.S. Treasury
$
1

 
$
—

 
$
—

 
$
1

U.S. government agencies
2

 
—

 
—

 
2

U.S. government-sponsored entities
190

 
—

 
(1
)
 
189

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,001

 
7

 
(3
)
 
1,005

Agency collateralized mortgage obligations
686

 
7

 
(5
)
 
688

Commercial mortgage-backed securities
202

 
4

 
—

 
206

States of the U.S. and political subdivisions
1,110

 
29

 
(1
)
 
1,138

Total debt securities held to maturity
$
3,192

 
$
47

 
$
(10
)
 
$
3,229

December 31, 2018
 
 
 
 
 
 
 
U.S. Treasury
$
1

 
$
—

 
$
—

 
$
1

U.S. government agencies
2

 
—

 
—

 
2

U.S. government-sponsored entities
215

 
—

 
(4
)
 
211

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,036

 
—

 
(26
)
 
1,010

Agency collateralized mortgage obligations
794

 
1

 
(24
)
 
771

Commercial mortgage-backed securities
126

 
1

 
(1
)
 
126

States of the U.S. and political subdivisions
1,080

 
3

 
(49
)
 
1,034

Total debt securities held to maturity
$
3,254

 
$
5

 
$
(104
)
 
$
3,155


 

There were no significant gross gains or gross losses realized on securities during the nine months ended September 30, 2019 or 2018.
As of September 30, 2019, the amortized cost and fair value of debt securities, by contractual maturities, were as follows:
TABLE 3.2
 
Available for Sale
 
Held to Maturity
(in millions)
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due in one year or less
$
113

 
$
113

 
$
34

 
$
34

Due after one year but within five years
147

 
148

 
177

 
176

Due after five years but within ten years
68

 
68

 
106

 
108

Due after ten years
92

 
91

 
986

 
1,012

 
420

 
420

 
1,303

 
1,330

Residential mortgage-backed securities:
 
 
 
 
 
 
 
Agency mortgage-backed securities
1,337

 
1,338

 
1,001

 
1,005

Agency collateralized mortgage obligations
1,178

 
1,188

 
686

 
688

Commercial mortgage-backed securities
309

 
316

 
202

 
206

Total debt securities
$
3,244

 
$
3,262

 
$
3,192

 
$
3,229


Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on residential mortgage-backed securities based on the payment patterns of the underlying collateral.
Following is information relating to securities pledged:
TABLE 3.3
(dollars in millions)
September 30,
2019
 
December 31,
2018
Securities pledged (carrying value):
 
 
 
To secure public deposits, trust deposits and for other purposes as required by law
$
4,503

 
$
3,874

As collateral for short-term borrowings
282

 
279

Securities pledged as a percent of total securities
74.1
%
 
63.0
%

Following are summaries of the fair values and unrealized losses of temporarily-impaired debt securities, segregated by length of impairment:

TABLE 3.4
 
Less than 12 Months
 
12 Months or More
 
Total
(dollars in millions)
#
 
Fair
 Value
 
Unrealized
Losses
 
#
 
Fair
 Value
 
Unrealized
Losses
 
#
 
Fair
 Value
 
Unrealized
Losses
Debt Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agencies
6

 
$
48

 
$
—

 
13

 
$
59

 
$
(1
)
 
19

 
$
107

 
$
(1
)
U.S. government-sponsored entities
—

 
—

 
—

 
7

 
149

 
(1
)
 
7

 
149

 
(1
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
17

 
281

 
(1
)
 
25

 
343

 
(3
)
 
42

 
624

 
(4
)
Agency collateralized mortgage obligations
4

 
113

 
—

 
33

 
229

 
(3
)
 
37

 
342

 
(3
)
Commercial mortgage-backed securities
1

 
54

 
(1
)
 
—

 
—

 
—

 
1

 
54

 
(1
)
States of the U.S. and political subdivisions
—

 
—

 
—

 
1

 
1

 
—

 
1

 
1

 
—

Other debt securities
—

 
—

 
—

 
1

 
2

 
—

 
1

 
2

 
—

Total temporarily impaired debt securities AFS
28

 
$
496

 
$
(2
)
 
80

 
$
783

 
$
(8
)
 
108

 
$
1,279

 
$
(10
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agencies
20

 
$
145

 
$
(1
)
 
—

 
$
—

 
$
—

 
20

 
$
145

 
$
(1
)
U.S. government-sponsored entities
1

 
36

 
—

 
11

 
227

 
(4
)
 
12

 
263

 
(4
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
16

 
259

 
(4
)
 
71

 
1,159

 
(32
)
 
87

 
1,418

 
(36
)
Agency collateralized mortgage obligations
2

 
82

 
(1
)
 
47

 
590

 
(22
)
 
49

 
672

 
(23
)
Non-agency collateralized mortgage obligations
1

 
—

 
—

 
—

 
—

 
—

 
1

 
—

 
—

Commercial mortgage-backed securities
4

 
155

 
(1
)
 
—

 
—

 
—

 
4

 
155

 
(1
)
States of the U.S. and political subdivisions
2

 
2

 
—

 
6

 
10

 
—

 
8

 
12

 
—

Other debt securities
—

 
—

 
—

 
1

 
2

 
—

 
1

 
2

 
—

Total temporarily impaired debt securities AFS
46

 
$
679

 
$
(7
)
 
136

 
$
1,988

 
$
(58
)
 
182

 
$
2,667

 
$
(65
)
 
Less than 12 Months
 
12 Months or More
 
Total
(dollars in millions)
#
 
Fair
 Value
 
Unrealized
Losses
 
#
 
Fair
 Value
 
Unrealized
Losses
 
#
 
Fair
 Value
 
Unrealized
Losses
Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
—

 
$
—

 
$
—

 
10

 
$
189

 
$
(1
)
 
10

 
$
189

 
$
(1
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
6

 
163

 
(1
)
 
11

 
143

 
(2
)
 
17

 
306

 
(3
)
Agency collateralized mortgage obligations
1

 
11

 
—

 
35

 
345

 
(5
)
 
36

 
356

 
(5
)
Commercial mortgage-backed securities
2

 
77

 
—

 
2

 
9

 
—

 
4

 
86

 
—

States of the U.S. and political subdivisions
10

 
36

 
—

 
7

 
30

 
(1
)
 
17

 
66

 
(1
)
Total temporarily impaired debt securities HTM
19

 
$
287

 
$
(1
)
 
65

 
$
716

 
$
(9
)
 
84

 
$
1,003

 
$
(10
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored entities
—

 
$
—

 
$
—

 
12

 
$
211

 
$
(4
)
 
12

 
$
211

 
$
(4
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
43

 
294

 
(4
)
 
47

 
694

 
(22
)
 
90

 
988

 
(26
)
Agency collateralized mortgage obligations
3

 
42

 
—

 
49

 
611

 
(24
)
 
52

 
653

 
(24
)
Commercial mortgage-backed securities
5

 
26

 
—

 
4

 
43

 
(1
)
 
9

 
69

 
(1
)
States of the U.S. and political subdivisions
159

 
590

 
(27
)
 
51

 
161

 
(22
)
 
210

 
751

 
(49
)
Total temporarily impaired debt securities HTM
210

 
$
952

 
$
(31
)
 
163

 
$
1,720

 
$
(73
)
 
373

 
$
2,672

 
$
(104
)

We do not intend to sell the debt securities and it is not more likely than not that we will be required to sell the securities before recovery of their amortized cost basis.
Other-Than-Temporary Impairment
We evaluate our investment securities portfolio for OTTI on a quarterly basis. Impairment is assessed at the individual security level. We consider an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. We did not recognize any OTTI losses on securities for the nine months ended September 30, 2019 or 2018.
States of the U.S. and Political Subdivisions
Our municipal bond portfolio with a carrying amount of $1.1 billion as of September 30, 2019 is highly rated with an average rating of AA and 100% of the portfolio rated A or better, while 99% have stand-alone ratings of A or better. All of the securities in the municipal portfolio are general obligation bonds. Geographically, municipal bonds support our primary footprint as 65% of the securities are from municipalities located in the primary states within which we conduct business. The average holding size of the securities in the municipal bond portfolio is $3.3 million. In addition to the strong stand-alone ratings, 63% of the municipalities have some formal credit enhancement insurance that strengthens the creditworthiness of their issue. Management reviews the credit profile of each issuer on a quarterly basis.