Securities



	Amortized Cost		Gross Unrealized				Fair Value
December 31, 2016	Amortized Cost		Gains		Losses		Fair Value
	(Dollars in millions)
AFS securities:
U.S. Treasury	$	2,669	$	2	$	84	$	2,587
GSE	190		—		10		180
Agency MBS	21,819		13		568		21,264
States and political subdivisions	2,198		56		49		2,205
Non-agency MBS	446		233		—		679
Other	11		—		—		11
Total AFS securities	$	27,333	$	304	$	711	$	26,926

HTM securities:
U.S. Treasury	$	1,098	$	20	$	—	$	1,118
GSE	2,197		14		30		2,181
Agency MBS	13,225		40		180		13,085
States and political subdivisions	110		—		—		110
Other	50		2		—		52
Total HTM securities	$	16,680	$	76	$	210	$	16,546



	Amortized Cost		Gross Unrealized				Fair Value
December 31, 2015	Amortized Cost		Gains		Losses		Fair Value
	(Dollars in millions)
AFS securities:
U.S. Treasury	$	1,836	$	2	$	6	$	1,832
GSE	51		—		—		51
Agency MBS	20,463		22		439		20,046
States and political subdivisions	2,312		103		40		2,375
Non-agency MBS	683		306		—		989
Other	4		—		—		4
Total AFS securities	$	25,349	$	433	$	485	$	25,297

HTM securities:
U.S. Treasury	$	1,097	$	22	$	—	$	1,119
GSE	5,045		16		98		4,963
Agency MBS	12,267		70		22		12,315
States and political subdivisions	63		—		—		63
Other	58		2		1		59
Total HTM securities	$	18,530	$	110	$	121	$	18,519

During the third quarter of 2016, Branch Bank entered into an early termination agreement with the FDIC that terminated the loss share agreements. As a result of the settlement, no future loss sharing or gain sharing will occur related to the Colonial acquisition. The accounting for the affected securities has not changed; however, these securities have been classified into their respective categories and prior periods have been revised to conform to the current presentation.

During 2015, BB&T transferred $517 million of HTM securities to AFS. These securities, which were sold in 2015, represented securities collateralized by student loans for which there was a significant increase in risk weighting as a result of the implementation of Basel III.

Certain investments in marketable debt securities and MBS issued by FNMA and FHLMC exceeded 10% of shareholders’ equity at December 31, 2016. The FNMA investments had total amortized cost and fair value of $13.9 billion and $13.6 billion, respectively. The FHLMC investments had total amortized cost and fair value of $7.8 billion and $7.6 billion, respectively.

The following table reflects changes in credit losses on securities with OTTI where a portion of the unrealized loss was recognized in OCI. Assets acquired from the FDIC were excluded from this table prior to the termination of the loss share agreements.



	Year Ended December 31,
	2016			2015			2014
	(Dollars in millions)
Balance at beginning of period	$	42		$	64		$	78
Credit losses on securities without previous OTTI	—			—			6
Credit losses on securities for which OTTI was previously recognized	—			4			—
Reductions for securities sold/settled during the period	(21		)	(22		)	(17		)
Credit recoveries through yield	(1		)	(4		)	(3		)
Included as a result of loss share termination	1			—			—
Balance at end of period	$	21		$	42		$	64

The amortized cost and estimated fair value of the securities portfolio by contractual maturity are shown in the following table. The expected life of MBS may differ from contractual maturities because borrowers have the right to prepay the underlying mortgage loans with or without prepayment penalties.



	AFS				HTM
December 31, 2016	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in millions)
Due in one year or less	$	275	$	275	$	—	$	—
Due after one year through five years	1,013		1,018		1,683		1,703
Due after five years through ten years	2,670		2,580		1,688		1,672
Due after ten years	23,375		23,053		13,309		13,171
Total debt securities	$	27,333	$	26,926	$	16,680	$	16,546

The following tables present the fair values and gross unrealized losses of investments based on the length of time that individual securities have been in a continuous unrealized loss position:



	Less than 12 months				12 months or more				Total
December 31, 2016	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in millions)
AFS securities:
U.S. Treasury	$	2,014	$	84	$	—	$	—	$	2,014	$	84
GSE	180		10		—		—		180		10
Agency MBS	14,842		342		5,138		226		19,980		568
States and political subdivisions	365		7		314		42		679		49
Total	$	17,401	$	443	$	5,452	$	268	$	22,853	$	711

HTM securities:
GSE	$	1,762	$	30	$	—	$	—	$	1,762	$	30
Agency MBS	7,717		178		305		2		8,022		180
Total	$	9,479	$	208	$	305	$	2	$	9,784	$	210



	Less than 12 months				12 months or more				Total
December 31, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in millions)
AFS securities:
U.S. Treasury	$	1,211	$	6	$	—	$	—	$	1,211	$	6
Agency MBS	12,052		199		5,576		240		17,628		439
States and political subdivisions	64		1		329		39		393		40
Total	$	13,327	$	206	$	5,905	$	279	$	19,232	$	485

HTM securities:
GSE	$	2,307	$	41	$	1,743	$	57	$	4,050	$	98
Agency MBS	3,992		21		124		1		4,116		22
Other	56		1		—		—		56		1
Total	$	6,355	$	63	$	1,867	$	58	$	8,222	$	121

Periodic reviews are conducted to identify and evaluate each investment with an unrealized loss for OTTI. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in AOCI for AFS securities. The unrealized losses on GSE securities and agency MBS were the result of increases in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers.

Cash flow modeling is used to evaluate non-agency MBS in an unrealized loss position for potential credit impairment. These models give consideration to long-term macroeconomic factors applied to current security default rates, prepayment rates and recovery rates and security-level performance. At December 31, 2016, there were no non-agency MBS with other than temporary credit impairment.

At December 31, 2016, the majority of the unrealized loss on municipal securities was the result of fair value hedge basis adjustments that are a component of amortized cost. Municipal securities in an unrealized loss position are evaluated for credit impairment through a qualitative analysis of issuer performance and the primary source of repayment. At December 31, 2016, the evaluation of municipal securities did not indicate any municipal securities with other than temporary credit impairment.