Investment Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

5. Investment Securities

Investment securities include debt and equity securities classified as available for sale. The Company's investment securities, principally debt securities, are carried at fair value on the Consolidated Balance Sheets with unrealizedgains (losses) recorded in Accumulated Other Comprehensive Income (AOCI), net of income taxes. Realized gains and losses are recognized in results of operations upon disposition of the securities using the specific identification method on a trade date basis. For information on the Company's methodology for determining the fair value of investment securities and related accounting policies, refer to Note 3on pages 68 – 71 of the Annual Report.

The following is a summary of investment securities as of March 31, 2014 and December 31, 2013:

		2014								2013
					Gross		Gross		Estimated				Gross		Gross		Estimated
					Unrealized		Unrealized		Fair				Unrealized		Unrealized		Fair
Description of Securities (Millions)			Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
State and municipal obligations		$	3,957	$	96	$	(20)	$	4,033	$	4,060	$	54	$	(79)	$	4,035
U.S. Government agency
	obligations		3		―		―		3		3		―		―		3
U.S. Government treasury
	obligations		268		4		(1)		271		318		3		(1)		320
Corporate debt securities			43		3		―		46		43		3		―		46
Mortgage-backed securities(a)			151		6		―		157		160		5		(1)		164
Equity securities(b)			17		51		―		68		29		95		―		124
Foreign government bonds and
	obligations		129		6		―		135		272		5		(1)		276
Other(c)			50		―		(2)		48		50		―		(2)		48
Total		$	4,618	$	166	$	(23)	$	4,761	$	4,935	$	165	$	(84)	$	5,016

• Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
• Primarily represents the Company's investment in the Industrial and Commercial Bank of China (ICBC).
• Other comprises investments in various mutual funds.

The following table provides information about the Company's investment securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2014 and December 31, 2013:

		2014								2013
		Less than 12 months				12 months or more				Less than 12 months				12 months or more
					Gross				Gross				Gross				Gross
			Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Description of Securities (Millions)			Fair Value		Losses		Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
State and municipal obligations		$	351	$	(13)	$	115	$	(7)	$	1,320	$	(63)	$	106	$	(16)
Foreign government bonds and
	obligations		―		―		―		―		208		(1)		―		―
U.S. Government treasury
	obligations		128		(1)		―		―		166		(1)		―		―
Mortgage-backed securities			―		―		―		―		35		(1)		―		―
Other			30		(1)		17		(1)		30		(1)		17		(1)
Total		$	509	$	(15)	$	132	$	(8)	$	1,759	$	(67)	$	123	$	(17)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of March 31, 2014 and December 31, 2013:

	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
2014:
90%–100%	58	$	509	$	(15)	10	$	123	$	(7)	68	$	632	$	(22)
Less than 90%	―		―		―	1		9		(1)	1		9		(1)
Total as of March 31, 2014	58	$	509	$	(15)	11	$	132	$	(8)	69	$	641	$	(23)
2013:
90%–100%	228	$	1,665	$	(53)	6	$	24	$	(2)	234	$	1,689	$	(55)
Less than 90%	13		94		(14)	5		99		(15)	18		193		(29)
Total as of December 31, 2013	241	$	1,759	$	(67)	11	$	123	$	(17)	252	$	1,882	$	(84)

The gross unrealized losses areattributed to overall wider credit spreads for state and municipal securities, wider credit spreads for specific issuers, adverse changes in market benchmark interest rates, or a combination thereof, all as compared to those prevailing when the investment securities were acquired.

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

Supplemental Information

Gross realized gains on the sales of investment securities, included in other non-interest revenues, were $39million and $36 million, for the three months ended March 31, 2014 and 2013, respectively. There were no gross realized losses for the three months ended March 31, 2014 and 2013.

Contractual maturities of investment securities, excluding equity securities and other securities, as of March 31, 2014 were as follows:

				Estimated
(Millions)		Cost		Fair Value
Due within 1 year	$	333	$	333
Due after 1 year but within 5 years		451		459
Due after 5 years but within 10 years		208		220
Due after 10 years		3,559		3,633
Total	$	4,551	$	4,645

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.