Investment Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

5. Investment Securities

Investment securities principally include debt securities that 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 Loss, 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 September 30, 2015 and December 31, 2014:

		2015								2014
					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		$	2,971	$	97	$	(4)	$	3,064	$	3,366	$	129	$	(2)	$	3,493
U.S. Government agency
	obligations		2		―		―		2		3		―		―		3
U.S. Government treasury
	obligations		297		5		―		302		346		4		―		350
Corporate debt securities			30		1		―		31		37		3		―		40
Mortgage-backed securities ^(a)			109		5		―		114		128		8		―		136
Equity securities			―		1		―		1		―		1		―		1
Foreign government bonds and
	obligations		379		6		(1)		384		350		9		―		359
Other ^(b)			50		―		(1)		49		50		―		(1)		49
Total		$	3,838	$	115	$	(6)	$	3,947	$	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 September 30, 2015 and December 31, 2014:

		2015								2014
		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		$	59	$	(2)	$	13	$	(2)	$	―	$	―	$	72	$	(2)
Foreign government bonds and
	obligations		31		(1)		―		―		―		―		―		―
Other			―		―		33		(1)		―		―		33		(1)
Total		$	90	$	(3)	$	46	$	(3)	$	―	$	―	$	105	$	(3)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of September 30, 2015 and December 31, 2014:

	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
($ in Millions)	Securities		Fair Value		Losses	Securities		Fair Value		Losses	Securities		Fair Value		Losses
2015:
90%–100%	35	$	88	$	(3)	12	$	37	$	(2)	47	$	125	$	(5)
Less than 90%	―		―		―	2		9		(1)	2		9		(1)
Total as of September 30, 2015	35	$	88	$	(3)	14	$	46	$	(3)	49	$	134	$	(6)

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.

Contractual maturities of investment securities with stated maturities as of September 30, 2015, were as follows:

				Estimated
(Millions)		Cost		Fair Value
Due within 1 year	$	459	$	459
Due after 1 year but within 5 years		324		331
Due after 5 years but within 10 years		259		275
Due after 10 years		2,746		2,832
Total^(a)	$	3,788	$	3,897

Balances primarily represent investments in state and municipal obligations, and foreign government bonds and obligations.

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.

Supplemental Information

Gross realized gains on the sales of investment securities, included in Other revenues, were $1 million for both the three and nine months ended September 30, 2015, and $20 million and $100 million for the three and nine months ended September 30, 2014, respectively. There were no realized losses during any of these periods.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details