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Available-for-Sale and Held-to-Maturity Securities
 12 Months Ended
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES
NOTE 6—AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES
The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities (dollars in millions):
 
Amortized
Cost
 
Gross
Unrealized /
Unrecognized
Gains
 
Gross
Unrealized /
Unrecognized
Losses
 
Fair Value
December 31, 2019:
 
 
 
 
 
 
 
Available-for-sale securities:(1)
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
16,267

 
$
836

 
$
(68
)
 
$
17,035

Agency debentures
632

 
27

 
—

 
659

US Treasuries
1,233

 
34

 
(40
)
 
1,227

Non-agency asset-backed securities(2)
417

 
2

 
(2
)
 
417

Non-agency mortgage-backed securities
159

 
4

 
—

 
163

Total available-for-sale securities
$
18,708

 
$
903

 
$
(110
)
 
$
19,501

Held-to-maturity securities:(1)
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
20,085

 
$
293

 
$
(49
)
 
$
20,329

Agency debentures
267

 
4

 
—

 
271

Other agency debt securities
1,617

 
31

 
(2
)
 
1,646

Total held-to-maturity securities
$
21,969

 
$
328

 
$
(51
)
 
$
22,246

 
 
 
 
 
 
 
 
December 31, 2018:

 
 
 
 
 

Available-for-sale securities:(1)
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
22,140

 
$
327

 
$
(305
)
 
$
22,162

Agency debentures
833

 
13

 
(7
)
 
839

Other agency debt securities
140

 
1

 
(2
)
 
139

Municipal bonds
12

 
—

 
—

 
12

Other
1

 
—

 
—

 
1

Total available-for-sale securities
$
23,126

 
$
341

 
$
(314
)
 
$
23,153

Held-to-maturity securities:(1) 
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
18,085

 
$
26

 
$
(363
)
 
$
17,748

Agency debentures
1,824

 
—

 
(16
)
 
1,808

Other agency debt securities
1,975

 
4

 
(44
)
 
1,935

Total held-to-maturity securities
$
21,884

 
$
30

 
$
(423
)
 
$
21,491


(1)
Securities with a fair value of $744 million were transferred from available-for-sale to held-to-maturity based on a change in intent and demonstrated ability to hold these to maturity in December 2019. Securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million were transferred from held-to-maturity to available-for-sale during the year ended December 31, 2018, as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. Securities with a fair value of $1.2 billion were transferred from available-for-sale to held-to-maturity during the year ended December 31, 2018 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. See Note 15—Shareholders' Equity for information on the impact to accumulated other comprehensive income.
(2)
Non-agency ABS collateralized by credit card, automobile loan and student loan receivables represented approximately 54%, 18% and 28%, respectively, of the non-agency ABS held at December 31, 2019.

Contractual Maturities
The following table presents the contractual maturities of all available-for-sale and held-to-maturity debt securities (dollars in millions):
 
December 31, 2019
 
Amortized Cost
 
Fair Value
Available-for-sale debt securities:
 
 
 
Due within one year
$
87

 
$
87

Due within one to five years
360

 
364

Due within five to ten years
9,379

 
10,107

Due after ten years
8,882

 
8,943

Total available-for-sale debt securities
$
18,708

 
$
19,501

Held-to-maturity debt securities:
 
 
 
Due within one year
$
47

 
$
47

Due within one to five years
2,000

 
2,029

Due within five to ten years
3,035

 
3,102

Due after ten years
16,887

 
17,068

Total held-to-maturity debt securities
$
21,969

 
$
22,246


At December 31, 2019 and 2018, the Company had pledged $7.4 billion and $6.3 billion, respectively, of held-to-maturity debt securities, and $456 million and $151 million, respectively, of available-for-sale securities, as collateral for FHLB advances, derivatives and other purposes.
Investments with Unrealized or Unrecognized Losses
The following table presents the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position (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, 2019:
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
2,045

 
$
(32
)
 
$
1,916

 
$
(36
)
 
$
3,961

 
$
(68
)
Non-agency mortgage-backed securities
50

 
—

 
—

 
—

 
50

 
—

US Treasuries
402

 
(40
)
 
—

 
—

 
402

 
(40
)
Non-agency asset-backed securities
251

 
(2
)
 
—

 
—

 
251

 
(2
)
Total temporarily impaired available-for-sale securities
$
2,748

 
$
(74
)
 
$
1,916

 
$
(36
)
 
$
4,664

 
$
(110
)
Held-to-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
1,337

 
$
(4
)
 
$
3,600

 
$
(45
)
 
$
4,937

 
$
(49
)
Other agency debt securities
181

 
(1
)
 
135

 
(1
)
 
316

 
(2
)
Total temporarily impaired held-to-maturity securities
$
1,518

 
$
(5
)
 
$
3,735

 
$
(46
)
 
$
5,253

 
$
(51
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018:
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
2,945

 
$
(34
)
 
$
7,826

 
$
(271
)
 
$
10,771

 
$
(305
)
Agency debentures
383

 
(1
)
 
116

 
(6
)
 
499

 
(7
)
Other agency debt securities
—

 
—

 
30

 
(2
)
 
30

 
(2
)
Municipal bonds
—

 
—

 
9

 
—

 
9

 
—

Other
1

 
—

 
—

 
—

 
1

 
—

Total temporarily impaired available-for-sale securities
$
3,329

 
$
(35
)
 
$
7,981

 
$
(279
)
 
$
11,310

 
$
(314
)
Held-to-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
$
2,802

 
$
(31
)
 
$
11,587

 
$
(332
)
 
$
14,389

 
$
(363
)
Agency debentures
776

 
(2
)
 
666

 
(14
)
 
1,442

 
(16
)
Other agency debt securities
97

 
(1
)
 
1,487

 
(43
)
 
1,584

 
(44
)
Total temporarily impaired held-to-maturity securities
$
3,675

 
$
(34
)
 
$
13,740

 
$
(389
)
 
$
17,415

 
$
(423
)

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 represents an other-than-temporary impairment as of December 31, 2019 or through the date of this report. The Company does not intend to sell the debt securities in an unrealized or unrecognized loss position 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.
There were no impairment losses recognized in earnings on available-for-sale or held-to-maturity securities during the years ended December 31, 2019, 2018 and 2017.
Gains (Losses) on Securities and Other, Net
The following table presents the components of gains (losses) on securities and other, net (dollars in millions):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Gains (losses) on available-for-sale securities, net:
 
 
 
 
 
Gains on available-for-sale securities(1)(2)
$
51

 
$
98

 
$
40

Losses on available-for-sale securities(1)(2)
(80
)
 
(54
)
 
—

Subtotal
(29
)
 
44

 
40

Equity method investment income (loss) and other(3)(4)
6

 
9

 
(12
)
Gains (losses) on securities and other, net
$
(23
)
 
$
53

 
$
28


(1)
In the second quarter 2019, the Company repositioned its balance sheet through the sales of $4.5 billion of lower-yielding investment securities. These sales enabled the reduction of our balance sheet size and the Company moved $6.6 billion of deposits to third-party banks generating additional capital capacity to support future share repurchases. Gains (losses) on securities and other, net for the year ended December 31, 2019 includes $80 million of losses related to these sales. As both the change in intent related to these securities and the sale of these securities occurred within the same reporting period, the Company presented the losses on the sale of these securities within the gains (losses) on securities and other, net line item.
(2)
In August 2018, the Company sold available-for-sale securities and reinvested the sale proceeds in agency-backed securities at current market rates. A subset of these securities had been purchased in lower interest rate environments and were in unrealized loss positions at the time of sale. As both the change in intent related to these securities and the sale of these securities occurred within the same reporting period, the Company presented the losses on the sale of these securities within the gains (losses) on securities and other, net line item.
(3)
Includes a $5 million gain on the sale of our Chicago Stock Exchange investment for the year ended December 31, 2018.
(4)
Includes losses of $14 million on hedge ineffectiveness for the year ended December 31, 2017. Beginning January 1, 2018, fair value hedging adjustments are recognized within net interest income. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information.