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Investment Securities
 3 Months Ended
Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

5. Investment Securities

Investment securities principally include debt securities the Company classifies as available-for-sale and carries at fair value on the Consolidated Balance Sheets, with unrealized gains (losses) recorded in Accumulated Other Comprehensive Income (AOCI), net of income taxes. Realized gains and losses are recognized on a trade-date basis in results of operations upon disposition of the securities using the specific identification method.

The following is a summary of investment securities as of March 31, 2015 and December 31, 2014:

2015  2014
  Gross  GrossEstimated    Gross  GrossEstimated
UnrealizedUnrealizedFairUnrealizedUnrealizedFair
Description of Securities (Millions)CostGainsLossesValueCostGainsLossesValue
State and municipal obligations $ 3,196   $ 126   $ (1)$ 3,321   $ 3,366   $ 129   $ (2)$ 3,493
U.S. Government agency
obligations 2    ―    ― 2    3    ― ― 3
U.S. Government treasury
obligations 346    6    ― 352    346    4    ― 350
Corporate debt securities 35    2    ― 37    37    3    ― 40
Mortgage-backed securities (a) 120    6    ― 126    128    8    ― 136
Equity securities ―    1    ― 1    ―    1    ― 1
Foreign government bonds and
obligations 518    11 ― 529    350    9 ― 359
Other (b) 50    ―    (1) 49    50    ―    (1) 49
Total $ 4,267   $ 152   $ (2)$ 4,417   $4,280  $154  $(3)$4,431

  • Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
  • 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, 2015 and December 31, 2014:

20152014
Less than 12 months12 months or moreLess than 12 months12 months or more
GrossGrossGrossGross
EstimatedUnrealizedEstimatedUnrealizedEstimatedUnrealizedEstimatedUnrealized
Description of Securities (Millions)Fair ValueLossesFair ValueLossesFair ValueLossesFair ValueLosses
State and municipal obligations $ ― $ ― $ 40 $ (1)$ ― $ ― $ 72 $ (2)
Other ― ― 33 (1) ― ― 33 (1)
Total $ ― $ ― $ 73 $ (2)$ ― $ ― $ 105 $ (3)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of March 31, 2015 and December 31, 2014:

Less than 12 months12 months or moreTotal
Ratio of Fair Value toGrossGrossGross
Amortized CostNumber ofEstimatedUnrealizedNumber ofEstimatedUnrealizedNumber ofEstimatedUnrealized
(Dollars in millions)SecuritiesFair ValueLossesSecuritiesFair ValueLossesSecuritiesFair ValueLosses
2015:
90%–100% ― $ ― $ ― 11 $73 $(2) 11 $ 73 $ (2)
Total as of March 31, 2015 ― $ ― $ ― 11 $ 73 $ (2) 11 $ 73 $ (2)
2014:
90%–100%―$―$―15$105$(3)15$105$(3)
Total as of December 31, 2014 ― $ ― $ ― 15$105$(3)15$105$(3)

The gross unrealized losses are attributed 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 the periods presented.

Supplemental Information

Gross realized gains on the sales of investment securities, included in Other revenues, were nil and $39 million for the three months ended March 31, 2015 and 2014, respectively. There were no realized losses for the three months ended March 31, 2015 or 2014.

Contractual maturities of investment securities with stated maturities as of March 31, 2015 were as follows:

    Estimated
(Millions)Cost Fair Value
Due within 1 year  $ 736   $ 737
Due after 1 year but within 5 years   331    338
Due after 5 years but within 10 years   239    255
Due after 10 years   2,911    3,037
Total  $ 4,217   $ 4,367

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.