XML 18 R11.htm IDEA: XBRL DOCUMENT v3.20.1
INVESTMENT SECURITIES
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES INVESTMENT SECURITIES
Investment securities classified as current and long-term were as follows at March 31, 2020 and December 31, 2019, respectively:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(in millions)
March 31, 2020
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
394

 
$
4

 
$
—

 
$
398

Mortgage-backed securities
3,438

 
160

 
(1
)
 
3,597

Tax-exempt municipal securities
1,549

 
16

 
(12
)
 
1,553

Mortgage-backed securities:
 
 
 
 
 
 
 
Commercial
834

 
16

 
(28
)
 
822

Asset-backed securities
1,126

 
1

 
(46
)
 
1,081

Corporate debt securities
4,082

 
48

 
(84
)
 
4,046

Total debt securities
$
11,423

 
$
245

 
$
(171
)
 
$
11,497

 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
353

 
$
1

 
$
—

 
$
354

Mortgage-backed securities
3,628

 
85

 
(3
)
 
3,710

Tax-exempt municipal securities
1,433

 
30

 
—

 
1,463

Mortgage-backed securities:
 
 
 
 
 
 
 
Commercial
786

 
18

 
—

 
804

Asset-backed securities
1,093

 
3

 
(3
)
 
1,093

Corporate debt securities
3,867

 
82

 
(2
)
 
3,947

Total debt securities
$
11,160

 
$
219

 
$
(8
)
 
$
11,371


We also held $7 million of equity securities consisting of common stock carried at fair value as of December 31, 2019.
Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at March 31, 2020 and December 31, 2019, respectively:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
(in millions)
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
2

 
$
—

 
$
—

 
$
—

 
$
2

 
$
—

Mortgage-backed
securities
67

 
(1
)
 
1

 
—

 
68

 
(1
)
Tax-exempt municipal
securities
309

 
(10
)
 
176

 
(2
)
 
485

 
(12
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Commercial
198

 
(15
)
 
131

 
(13
)
 
329

 
(28
)
Asset-backed securities
144

 
(5
)
 
891

 
(41
)
 
1,035

 
(46
)
Corporate debt securities
1,453

 
(55
)
 
710

 
(29
)
 
2,163

 
(84
)
Total debt securities
$
2,173

 
$
(86
)
 
$
1,909

 
$
(85
)
 
$
4,082

 
$
(171
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
48

 
$
—

 
$
23

 
$
—

 
$
71

 
$
—

Mortgage-backed
securities
315

 
(1
)
 
204

 
(2
)
 
519

 
(3
)
Tax-exempt municipal
securities
58

 
—

 
75

 
—

 
133

 
—

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Commercial
118

 
—

 
36

 
—

 
154

 
—

Asset-backed securities
20

 
—

 
607

 
(3
)
 
627

 
(3
)
Corporate debt securities
589

 
(2
)
 
155

 
—

 
744

 
(2
)
Total debt securities
$
1,148

 
$
(3
)
 
$
1,100

 
$
(5
)
 
$
2,248

 
$
(8
)

Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at March 31, 2020. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types.
Our unrealized losses from all securities were generated from approximately 450 positions out of a total of approximately 1,500 positions at March 31, 2020. All issuers of securities we own that were trading at an unrealized loss at March 31, 2020 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At March 31, 2020, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. Additionally, we did not record any material credit allowances for securities that were in an unrealized loss position at March 31, 2020.
The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three months ended March 31, 2020 and 2019:
 
Three months ended
March 31,
 
2020
 
2019
 
(in millions)
Gross realized gains
$
56

 
$
10

Gross realized losses
(7
)
 
(12
)
Net realized capital gains (losses)
$
49

 
$
(2
)

There were no material other-than-temporary impairments for the three months ended March 31, 2019.
The contractual maturities of debt securities available for sale at March 31, 2020, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Amortized
Cost
 
Fair
Value
 
(in millions)
Due within one year
$
1,337

 
$
1,339

Due after one year through five years
1,918

 
1,905

Due after five years through ten years
1,750

 
1,736

Due after ten years
1,020

 
1,017

Mortgage and asset-backed securities
5,398

 
5,500

Total debt securities
$
11,423

 
$
11,497