Investment Securities

As of June 30, 2017 and December 31, 2016, investment securities were comprised of the following:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in millions)
June 30, 2017
Available-for-sale securities
Agency - Commercial	$	522	$	1	$	(5	)	$	518
Agency - Residential	1,039		2		(12		)	1,029
Municipal obligations	37		—		—			37
Corporate debt obligations	30		—		—			30
Total available-for-sale securities (1)	$	1,628	$	3	$	(17	)	$	1,614
Held-to-maturity securities
Agency - Commercial	$	559	$	1	$	(5	)	$	555
Agency - Residential	455		1		(3		)	453
Total held-to-maturity securities (1)	$	1,014	$	2	$	(8	)	$	1,008
December 31, 2016
Available-for-sale securities
Agency - Commercial	$	551	$	2	$	(5	)	$	548
Agency - Residential	913		1		(16		)	898
Municipal obligations	34		—		—			34
Total available-for-sale securities (1)	$	1,498	$	3	$	(21	)	$	1,480
Held-to-maturity securities
Agency - Commercial	$	595	$	—	$	(6	)	$	589
Agency - Residential	498		1		(4		)	495
Total held-to-maturity securities (1)	$	1,093	$	1	$	(10	)	$	1,084


(1)	There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10 percent of stockholders’ equity at June 30, 2017 or December 31, 2016.

We evaluate AFS and HTM investment securities for other than temporary impairment on a quarterly basis. An OTTI is considered to have occurred when the fair value of a debt security is below its amortized costs and we (1) have the intent to sell the security, (2) will more likely than not be required to sell the security before recovery of its amortized cost, or (3) do not expect to recover the entire amortized cost basis of the security. Investments that have an OTTI are written down through a charge to earnings for the amount representing the credit loss on the security. Gains and losses related to all other factors are recognized in other comprehensive income (loss). During the three and six months ended June 30, 2017 and June 30, 2016, we had no OTTI losses.

Available-for-sale securities

Securities available-for-sale are carried at fair value, with unrealized gains and losses, to the extent they are temporary in nature, reported as a component of other comprehensive income.

We purchased $77 million and $300 million of AFS securities, which included U.S. government sponsored agency MBS, corporate debt obligations, and municipal obligations during the three and six months ended June 30, 2017, respectively. We purchased $40 million and $68 million of AFS securities, which included U.S. government sponsored agencies comprised of MBS and municipal obligations during the three and six months ended June 30, 2016, respectively.

Gains (losses) on sales of AFS securities are reported in other noninterest income in the Consolidated Statements of Operations. We sold $62 million of AFS securities during the three and six months ended June 30, 2017, which did not include those related to mortgage loans that had been securitized for sale in the normal course of business. These sales resulted in a realized gain of $1 million during both the three and six months ended June 30, 2017. During both the three and six months ended June 30, 2016, there were $175 million in sales of AFS securities, which did not include those related to mortgage loans that had been securitized for sale in the normal course of business. These sales resulted in a realized gain of $1 million during both the three and six months ended June 30, 2016.

Held-to-maturity securities

Investment securities HTM are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the interest method. Unrealized losses are not recorded to the extent they are temporary in nature.

Transfers of investment securities into the HTM category from the AFS category are accounted for at fair value on the date of transfer. There were no such transfers during both the three and six months ended June 30, 2017 and June 30, 2016.

There were no purchases of HTM securities during the three and six months ended June 30, 2017. During the three and six months ended June 30, 2016, we purchased zero and $15 million of HTM securities, respectively. There were no sales of HTM securities during both the three and six months ended June 30, 2017 and June 30, 2016.

The following table summarizes, by duration, the unrealized loss positions on investment securities:



	Unrealized Loss Position with Duration 12 Months and Over					Unrealized Loss Position with Duration Under 12 Months
	Fair Value		Number of Securities	Unrealized Loss		Fair Value		Number of Securities	Unrealized Loss
	(Dollars in millions)
June 30, 2017
Available-for-sale securities
Agency - Commercial	$	5	1	$	—	$	367	30	$	(5	)
Agency - Residential	—		—	—		611		49	(12		)
Municipal obligations	—		—	—		20		7	—
Corporate debt obligations	—		—	—		3		1	—
Held-to-maturity securities
Agency - Commercial	$	4	1	$	—	$	429	27	$	(5	)
Agency - Residential	—		—	—		356		44	(3		)
December 31, 2016
Available-for-sale securities
Agency - Commercial	$	6	1	$	—	$	345	29	$	(5	)
Agency - Residential	—		—	—		748		55	(16		)
Municipal obligations	—		—	—		17		8	—
Held-to-maturity securities
Agency - Commercial	$	—	—	$	—	$	528	34	$	(6	)
Agency - Residential	—		—	—		385		43	(4		)

The amortized cost and estimated fair value of securities are presented below by contractual maturity:



	Investment Securities Available-for-Sale						Investment Securities Held-to-maturity
	Amortized Cost		Fair Value		Weighted Average Yield		Amortized Cost		Fair Value		Weighted Average Yield
	(Dollars in millions)
June 30, 2017
Due after one year through five years	$	16	$	16	3.39	%	$	—	$	—	—	%
Due after five years through 10 years	35		35		5.18	%	61		61		2.50	%
Due after 10 years	1,577		1,563		2.30	%	953		947		2.45	%
Total	$	1,628	$	1,614			$	1,014	$	1,008

We pledge investment securities, primarily agency collateralized and municipal taxable mortgage obligations, to collateralize lines of credit and/or borrowings. At June 30, 2017, we had pledged investment securities of $1.4 billion compared to $879 million at December 31, 2016.