NOTE 6—AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES

The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2017 and 2016 are shown in the following tables (dollars in millions):



	Amortized Cost		Gross Unrealized / Unrecognized Gains		Gross Unrealized / Unrecognized Losses			Fair Value
December 31, 2017:
Available-for-sale securities:
Debt securities:
Agency mortgage-backed securities	$	19,395	$	47	$	(247	)	$	19,195
Agency debentures	939		39		(12		)	966
US Treasuries	452		10		(4		)	458
Agency debt securities	34		—		(1		)	33
Municipal bonds	20		—		—			20
Total debt securities	20,840		96		(264		)	20,672
Publicly traded equity securities⁽¹⁾	7		—		—			7
Total available-for-sale securities	$	20,847	$	96	$	(264	)	$	20,679
Held-to-maturity securities:
Agency mortgage-backed securities	$	20,502	$	95	$	(193	)	$	20,404
Agency debentures	710		—		(2		)	708
Agency debt securities	2,615		15		(35		)	2,595
Other	12		—		—			12
Total held-to-maturity securities	$	23,839	$	110	$	(230	)	$	23,719

December 31, 2016:
Available-for-sale securities:⁽²⁾
Debt securities:
Agency mortgage-backed securities	$	12,946	$	24	$	(336	)	$	12,634
Agency debentures	791		18		(21		)	788
US Treasuries	452		—		(45		)	407
Agency debt securities	25		—		(1		)	24
Municipal bonds	32		—		—			32
Total debt securities	14,246		42		(403		)	13,885
Publicly traded equity securities⁽¹⁾	7		—		—			7
Total available-for-sale securities	$	14,253	$	42	$	(403	)	$	13,892
Held-to-maturity securities:⁽²⁾
Agency mortgage-backed securities	$	12,868	$	123	$	(152	)	$	12,839
Agency debentures	29		—		—			29
Agency debt securities	2,854		26		(32		)	2,848
Total held-to-maturity securities	$	15,751	$	149	$	(184	)	$	15,716


(1)	Consists of investments in a mutual fund related to the Community Reinvestment Act.


(2)	Securities with a fair value of approximately $492 million were transferred from available-for-sale securities to held-to-maturity securities during the year ended December 31, 2016 pursuant to an evaluation of our investment strategy and an assessment by management about our intent and ability to hold those particular securities until maturity.

Contractual Maturities

The contractual maturities of all available-for-sale and held-to-maturity debt securities at December 31, 2017 are shown in the following table (dollars in millions):



	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due within one year	$	—	$	—
Due within one to five years	363		353
Due within five to ten years	8,713		8,647
Due after ten years	11,764		11,672
Total available-for-sale debt securities	$	20,840	$	20,672
Held-to-maturity debt securities:
Due within one year	$	160	$	159
Due within one to five years	2,027		2,039
Due within five to ten years	5,509		5,486
Due after ten years	16,143		16,035
Total held-to-maturity debt securities	$	23,839	$	23,719

At December 31, 2017 and 2016, the Company had pledged $5.5 billion and $0.5 billion, respectively, of held-to-maturity debt securities, and $352 million and $6 million, respectively, of available-for-sale securities, as collateral for FHLB advances, derivatives and other purposes.

Investments with Unrealized or Unrecognized Losses

The following tables show the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, aggregated by investment category, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position at December 31, 2017 and 2016 (dollars in millions):



	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized / Unrecognized Losses			Fair Value		Unrealized / Unrecognized Losses			Fair Value		Unrealized / Unrecognized Losses
December 31, 2017:
Available-for-sale securities:
Debt securities:
Agency mortgage-backed securities	$	4,638	$	(23	)	$	8,027	$	(224	)	$	12,665	$	(247	)
Agency debentures	—		—			283		(12		)	283		(12		)
US Treasuries	—		—			147		(4		)	147		(4		)
Agency debt securities	9		—			24		(1		)	33		(1		)
Municipal bonds	—		—			11		—			11		—
Publicly traded equity securities	7		—			—		—			7		—
Total temporarily impaired available-for-sale securities	$	4,654	$	(23	)	$	8,492	$	(241	)	$	13,146	$	(264	)
Held-to-maturity securities:
Agency mortgage-backed securities	$	9,982	$	(78	)	$	4,906	$	(115	)	$	14,888	$	(193	)
Agency debentures	597		(2		)	9		—			606		(2		)
Agency debt securities	373		(3		)	1,345		(32		)	1,718		(35		)
Total temporarily impaired held-to-maturity securities	$	10,952	$	(83	)	$	6,260	$	(147	)	$	17,212	$	(230	)

December 31, 2016:
Available-for-sale securities:
Debt securities:
Agency mortgage-backed securities	$	9,281	$	(279	)	$	1,620	$	(57	)	$	10,901	$	(336	)
Agency debentures	454		(21		)	—		—			454		(21		)
US Treasuries	407		(45		)	—		—			407		(45		)
Agency debt securities	24		(1		)	—		—			24		(1		)
Municipal bonds	13		—			—		—			13		—
Publicly traded equity securities	7		—			—		—			7		—
Total temporarily impaired available-for-sale securities	$	10,186	$	(346	)	$	1,620	$	(57	)	$	11,806	$	(403	)
Held-to-maturity securities:
Agency mortgage-backed securities	$	5,929	$	(123	)	$	1,272	$	(29	)	$	7,201	$	(152	)
Agency debentures	18		—			—		—			18		—
Agency debt securities	1,739		(32		)	18		—			1,757		(32		)
Total temporarily impaired held-to-maturity securities	$	7,686	$	(155	)	$	1,290	$	(29	)	$	8,976	$	(184	)

The Company does not believe that any individual unrealized loss in the available-for-sale portfolio or unrecognized loss in the held-to-maturity portfolio as of December 31, 2017 represents a credit loss. The Company does not intend to sell the debt securities in an unrealized or unrecognized loss position as of the balance sheet date and it is not more likely than not that the Company will be required to sell the debt securities before the anticipated recovery of its remaining amortized cost of the debt securities in an unrealized or unrecognized loss position at December 31, 2017.

There were no impairment losses recognized in earnings on available-for-sale or held-to-maturity securities during the years ended December 31, 2017, 2016 and 2015.

The credit loss component of debt securities held by the Company that had a noncredit loss component previously recognized in other comprehensive income was $136 million at both December 31, 2017 and December 31, 2016, decreasing from $152 million at December 31, 2015.

Gains (Losses) on Securities and Other, Net

The following table shows the components of the gains (losses) on securities and other, net line item on the consolidated statement of income for the years ended December 31, 2017, 2016 and 2015 (dollars in millions):



	Year Ended December 31,
	2017			2016			2015
Reclassification of deferred losses on cash flow hedges	$	—		$	—		$	(370	)
Gains on available-for-sale securities, net:
Gains on available-for-sale securities	40			54			58
Losses on available-for-sale securities	—			(1		)	(20		)
Subtotal	40			53			38
Hedge ineffectiveness	(14		)	(6		)	(1		)
Equity method investment income (loss) and other	2			(5		)	9
Gains (losses) on securities and other, net	$	28		$	42		$	(324	)