Investment Securities

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

5. Investment Securities

Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets, with unrealized gains and losses recorded in AOCI, net of income taxes. Realized gains and losses are recognized upon disposition of the securities using the specific identification method.

Investment securities also include equity securities carried at fair value on the Consolidated Balance Sheets. The unrealized gains and losses on equity securities are recorded in the Consolidated Statements of Income.

The following is a summary of investment securities as of March 31, 2019 and December 31, 2018:

		2019								2018
					Gross		Gross		Estimated				Gross		Gross		Estimated
Description of Securities					Unrealized		Unrealized		Fair				Unrealized		Unrealized		Fair
(Millions)			Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
Available-for-sale debt securities:
	State and municipal obligations	$	342	$	6	$	(1)	$	347	$	594	$	4	$	(2)	$	596
	U.S. Government agency obligations		10		―		―		10		10		―		―		10
	U.S. Government treasury obligations		5,404		14		(9)		5,409		3,452		5		(17)		3,440
	Corporate debt securities		29		―		―		29		28		―		―		28
	Mortgage-backed securities ^(a)		48		1		―		49		50		1		―		51
	Foreign government bonds and obligations		565		1		―		566		474		―		―		474
Equity securities ^(b)			50		―		(3)		47		51		―		(3)		48
Total		$	6,448	$	22	$	(13)	$	6,457	$	4,659	$	10	$	(22)	$	4,647

Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
Equity securities comprise investments in common stock and mutual funds.

The following table provides information about our investment securities with gross unrealized losses and the length of time that individual securities have been in an unrealized loss position as of March 31, 2019 and December 31, 2018:

	2019								2018
	Less than 12 months				12 months or more				Less than 12 months				12 months or more
				Gross				Gross				Gross				Gross
Description of Securities (Millions)		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
State and municipal obligations	$	―	$	―	$	52	$	(1)	$	―	$	―	$	82	$	(1)
U.S. Government treasury obligations		―		―		998		(9)		224		(2)		791		(15)
Total	$	―	$	―	$	1,050	$	(10)	$	224	$	(2)	$	873	$	(16)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of March 31, 2019 and December 31, 2018:

	Less than 12 months					12 months or more					Total
Ratio of Fair Value to					Gross					Gross					Gross
Amortized Cost	Number of		Estimated		Unrealized	Number of		Estimated		Unrealized	Number of		Estimated		Unrealized
(Dollars in millions)	Securities		Fair Value		Losses	Securities		Fair Value		Losses	Securities		Fair Value		Losses
2019:
90%–100%	―	$	―	$	―	26	$	1,050	$	(10)	26	$	1,050	$	(10)
Total as of March 31, 2019	―	$	―	$	―	26	$	1,050	$	(10)	26	$	1,050	$	(10)

2018:
90%–100%	2	$	224	$	(2)	29	$	873	$	(16)	31	$	1,097	$	(18)
Total as of December 31, 2018	2	$	224	$	(2)	29	$	873	$	(16)	31	$	1,097	$	(18)

The gross unrealized losses for available-for-sale debt securities are attributed to wider credit spreads for specific issuers, adverse changes in benchmark interest rates, or a combination thereof, all compared to those prevailing when the investment securities were purchased.

Overall, for the available-for-sale debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses, and (iii) we expect that the contractual principal and interest will be received on the securities. As a result, we recognized no other-than-temporary impairment during the periods presented.

Contractual maturities for investment securities with stated maturities as of March 31, 2019 were as follows:

				Estimated
(Millions)		Cost		Fair Value
Due within 1 year	$	4,599	$	4,600
Due after 1 year but within 5 years		1,315		1,319
Due after 5 years but within 10 years		179		181
Due after 10 years		305		310
Total	$	6,398	$	6,410

The expected payments on state and municipal obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.