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Investment Securities | 9 Months Ended
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Sep. 30, 2014
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | 5. Investment Securities Investment securities include debt and equity securities that the Company classifies as available for sale. The Company’s investment securities, principally debt securities, are carried at fair value on the Consolidated Balanc e Sheets with unrealized gains (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. F or information on the Company’s methodology for de termining the fair value of investment securities and related accounting policies, r efer to Note 3 on pages 68 – 71 of the Annual Report. The following is a summary of investment securities as of September 30, 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 |  | $ | 3,628 |  | $ | 130 |  | $ | (3) |  | $ | 3,755 |  | $ | 4,060 |  | $ | 54 |  | $ | (79) |  | $ | 4,035
U.S. Government agency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| obligations |  |  | 3 |  |  | ― |  |  | ― |  |  | 3 |  |  | 3 |  |  | ― |  |  | ― |  |  | 3
U.S. Government treasury |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| obligations |  |  | 346 |  |  | 4 |  |  | (1) |  |  | 349 |  |  | 318 |  |  | 3 |  |  | (1) |  |  | 320
Corporate debt securities |  |  | 39 |  |  | 3 |  |  | ― |  |  | 42 |  |  | 43 |  |  | 3 |  |  | ― |  |  | 46
Mortgage-backed securities (a) |  |  | 137 |  |  | 7 |  |  | ― |  |  | 144 |  |  | 160 |  |  | 5 |  |  | (1) |  |  | 164
Equity securities (b) |  |  | ― |  |  | 1 |  |  | ― |  |  | 1 |  |  | 29 |  |  | 95 |  |  | ― |  |  | 124
Foreign government bonds and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| obligations |  |  | 399 |  |  | 8 |  |  | ― |  |  | 407 |  |  | 272 |  |  | 5 |  |  | (1) |  |  | 276
Other (c) |  |  | 50 |  |  | ― |  |  | (1) |  |  | 49 |  |  | 50 |  |  | ― |  |  | (2) |  |  | 48
Total |  | $ | 4,602 |  | $ | 153 |  | $ | (5) |  | $ | 4,750 |  | $ | 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) as of December 31, 2013. 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 September 30, 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 |  | $ | ― |  | $ | ― |  | $ | 72 |  | $ | (3) |  | $ | 1,320 |  | $ | (63) |  | $ | 106 |  | $ | (16)
Foreign government bonds and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| obligations |  |  | ― |  |  | ― |  |  | ― |  |  | ― |  |  | 208 |  |  | (1) |  |  | ― |  |  | ―
U.S. Government treasury |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| obligations |  |  | 127 |  |  | (1) |  |  | ― |  |  | ― |  |  | 166 |  |  | (1) |  |  | ― |  |  | ―
Mortgage-backed securities |  |  | ― |  |  | ― |  |  | ― |  |  | ― |  |  | 35 |  |  | (1) |  |  | ― |  |  | ―
Other |  |  | ― |  |  | ― |  |  | 32 |  |  | (1) |  |  | 30 |  |  | (1) |  |  | 17 |  |  | (1)
Total |  | $ | 127 |  | $ | (1) |  | $ | 104 |  | $ | (4) |  | $ | 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 September 30, 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% |  | 6 |  | $ | 127 |  | $ | (1) |  | 17 |  | $ | 104 |  | $ | (4) |  | 23 |  | $ | 231 |  | $ | (5)
Total as of September 30, 2014 |  | 6 |  | $ | 127 |  | $ | (1) |  | 17 |  | $ | 104 |  | $ | (4) |  | 23 |  | $ | 231 |  | $ | (5)
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 are attributed to overall wider credit spreads for s tate and municipal securities, wide r 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 currently 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 reco gnized no other-than-temporary impairment during the periods presented. Supplemental Information Gross realized gains on the sales of investment securities, included in Other revenues for the three and nine months ended September 30, 2014 were $20 million and $100 million, respectively. Gross realized gains on the sale of investment securities, included in Other revenues for the three and nine months ended September 30, 2013 were, $37 million and $102 million, respectively. There were no realized lo sses for the three and nine months ended September 30, 2014 and 2013. Contractual maturities of investment securities, excluding equity securities and other securities, as of September 30, 2014 were as follows:
|  |  |  |  |  |  | Estimated
(Millions) |  | Cost |  | Fair Value
Due within 1 year |  | $ | 579 |  | $ | 580
Due after 1 year but within 5 years |  |  | 435 |  |  | 442
Due after 5 years but within 10 years |  |  | 235 |  |  | 251
Due after 10 years |  |  | 3,303 |  |  | 3,427
Total |  | $ | 4,552 |  | $ | 4,700
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.

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