INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investment securities classified as current and long-term were as follows at June 30, 2020 and December 31, 2019, respectively:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
June 30, 2020
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	929	$	3	$	—	$	932
Mortgage-backed securities	3,861		183		(1)		4,043
Tax-exempt municipal securities	1,464		35		(3)		1,496


Commercial mortgage-backed securities	961		44		(4)		1,001
Asset-backed securities	1,186		4		(17)		1,173
Corporate debt securities	4,398		190		(8)		4,580
Total debt securities	$	12,799	$	459	$	(33)	$	13,225

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


Commercial mortgage-backed securities	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 of individual securities that have been in a continuous unrealized loss position were as follows at June 30, 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)
June 30, 2020
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	342	$	—	$	—	$	—	$	342	$	—
Mortgage-backed securities	406		(1)		—		—		406		(1)
Tax-exempt municipal securities	181		(3)		12		—		193		(3)


Commercial mortgage-backed securities	204		(3)		33		(1)		237		(4)
Asset-backed securities	152		(1)		814		(16)		966		(17)
Corporate debt securities	301		(4)		177		(4)		478		(8)
Total debt securities	$	1,586	$	(12)	$	1,036	$	(21)	$	2,622	$	(33)

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		—


Commercial mortgage-backed securities	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 June 30, 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 200 positions out of a total of approximately 1,500 positions at June 30, 2020. All issuers of securities we own that were trading at an unrealized loss at June 30, 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 June 30, 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 June 30, 2020.

The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and six months ended June 30, 2020 and 2019:


	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
	(in millions)
Gross realized gains	$	13	$	8	$	69	$	18
Gross realized losses	(11)		(1)		(18)		(13)
Net realized capital gains	$	2	$	7	$	51	$	5

There were no material other-than-temporary impairments for the three and six months ended June 30, 2019.

The contractual maturities of debt securities available for sale at June 30, 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	$	1,790	$	1,795
Due after one year through five years	2,043		2,114
Due after five years through ten years	1,834		1,944
Due after ten years	1,124		1,155
Mortgage and asset-backed securities	6,008		6,217
Total debt securities	$	12,799	$	13,225