Investment Securities

Our portfolio of securities includes bonds, equity securities, asset- and mortgage-backed securities, interests in securitization trusts, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale securities were as follows.



	March 31, 2014									December 31, 2013
	Amortized cost		Gross unrealized					Fair value		Amortized cost		Gross unrealized					Fair value
($ in millions)	Amortized cost		gains		losses			Fair value		Amortized cost		gains		losses			Fair value
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	1,293	$	1	$	(46	)	$	1,248	$	1,495	$	1	$	(69	)	$	1,427
U.S. States and political subdivisions	331		7		—			338		316		—		(1		)	315
Foreign government	275		6		(1		)	280		287		4		(3		)	288
Mortgage-backed residential (a)	10,475		54		(285		)	10,244		11,131		49		(398		)	10,782
Mortgage-backed commercial	61		1		—			62		39		—		—			39
Asset-backed	2,121		15		(2		)	2,134		2,207		15		(3		)	2,219
Corporate debt	1,055		30		(2		)	1,083		1,052		23		(6		)	1,069
Total debt securities	15,611		114		(336		)	15,389		16,527		92		(480		)	16,139
Equity securities	915		46		(23		)	938		898		74		(28		)	944
Total available-for-sale securities (b)	$	16,526	$	160	$	(359	)	$	16,327	$	17,425	$	166	$	(508	)	$	17,083


(a)	Residential mortgage-backed securities include agency-backed bonds totaling $7,647 million and $8,266 million at March 31, 2014, and December 31, 2013, respectively.


(b)	Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $15 million and $15 million at March 31, 2014, and December 31, 2013, respectively.

The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from scheduled maturities.



	Total				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years (a)
($ in millions)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
March 31, 2014
Fair value of available-for-sale debt securities (b)
U.S. Treasury and federal agencies	$	1,248	1.3	%	$	9	3.0	%	$	573	1.2	%	$	666	1.4	%	$	—	—	%
U.S. States and political subdivisions	338		3.4		42		1.9		10		1.2		103		2.7		183		4.3
Foreign government	280		2.8		29		2.9		90		2.5		160		3.0		1		2.8
Mortgage-backed residential	10,244		2.7		—		—		80		2.1		—		3.4		10,164		2.7
Mortgage-backed commercial	62		1.3		—		—		—		—		—		—		62		1.3
Asset-backed	2,134		2.0		76		2.4		1,456		1.9		432		2.0		170		2.6
Corporate debt	1,083		4.2		27		3.2		533		3.1		454		5.2		69		5.8
Total available-for-sale debt securities	$	15,389	2.6		$	183	2.5		$	2,742	1.9		$	1,815	2.6		$	10,649	2.7
Amortized cost of available-for-sale debt securities	$	15,611			$	182			$	2,729			$	1,828			$	10,872
December 31, 2013
Fair value of available-for-sale debt securities (b)
U.S. Treasury and federal agencies	$	1,427	1.3	%	$	9	3.0	%	$	766	1.2	%	$	652	1.3	%	$	—	—	%
U.S. States and political subdivisions	315		3.3		39		1.3		10		0.6		102		2.6		164		4.3
Foreign government	288		2.7		18		2.7		105		2.4		164		2.9		1		2.7
Mortgage-backed residential	10,782		2.7		—		—		90		2.1		3		4.2		10,689		2.7
Mortgage-backed commercial	39		1.3		—		—		—		—		—		—		39		1.3
Asset-backed	2,219		2.0		76		2.4		1,483		1.9		491		1.9		169		2.7
Corporate debt	1,069		4.1		24		3.4		547		3.0		430		5.3		68		5.7
Total available-for-sale debt securities	$	16,139	2.5		$	166	2.3		$	3,001	1.9		$	1,842	2.5		$	11,130	2.7
Amortized cost of available-for-sale debt securities	$	16,527			$	165			$	3,000			$	1,882			$	11,480


(a)	Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment options.


(b)	Yields on tax-exempt obligations are computed on a tax-equivalent basis.

The balances of cash equivalents were $2.0 billion and $2.4 billion at March 31, 2014, and December 31, 2013, respectively, and were composed primarily of money market accounts and short-term securities, including U.S. Treasury bills.

The following table presents gross gains and losses realized upon the sales of available-for-sale securities and other-than-temporary impairment.



	Three months ended March 31,
($ in millions)	2014			2013
Gross realized gains	$	60		$	70
Gross realized losses	(7		)	(11		)
Other-than-temporary impairment	(10		)	(8		)
Other gain on investments, net	$	43		$	51

The following table presents interest and dividends on available-for-sale securities.



	Three months ended March 31,
($ in millions)	2014		2013
Taxable interest	$	86	$	63
Taxable dividends	5		5
Interest and dividends exempt from U.S. federal income tax	4		—
Interest and dividends on available-for-sale securities	$	95	$	68

Certain available-for-sale securities were sold at a loss in 2014 and 2013 as a result of market conditions within these respective periods (e.g., change in market interest rates or a downgrade in the rating of a debt security). The table below summarizes available-for-sale securities in an unrealized loss position in accumulated other comprehensive income. Based on the methodology described below that was applied to these securities, we believe that the unrealized losses relate to factors other than credit losses in the current market environment. As of March 31, 2014, we did not have the intent to sell the debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As of March 31, 2014, we had the ability and intent to hold equity securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss position in accumulated other comprehensive income are not considered to be other-than-temporarily impaired at March 31, 2014. Refer to Note 1 to the Consolidated Financial Statements in our 2013 Annual Report on Form 10-K for additional information related to investment securities and our methodology for evaluating potential other-than-temporary impairments.



	March 31, 2014										December 31, 2013
	Less than 12 months					12 months or longer					Less than 12 months					12 months or longer
($ in millions)	Fair value		Unrealized loss			Fair value		Unrealized loss			Fair value		Unrealized loss			Fair value		Unrealized loss
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	1,227	$	(46	)	$	—	$	—		$	1,405	$	(69	)	$	—	$	—
U.S. States and political subdivisions	24		—			—		—			212		(1		)	—		—
Foreign government	40		(1		)	—		—			114		(3		)	—		—
Mortgage-backed	6,886		(263		)	247		(22		)	7,503		(388		)	100		(10		)
Asset-backed	387		(2		)	—		—			407		(3		)	1		—
Corporate debt	148		(2		)	5		—			310		(6		)	3		—
Total temporarily impaired debt securities	8,712		(314		)	252		(22		)	9,951		(470		)	104		(10		)
Temporarily impaired equity securities	280		(17		)	57		(6		)	167		(12		)	100		(16		)
Total temporarily impaired available-for-sale securities	$	8,992	$	(331	)	$	309	$	(28	)	$	10,118	$	(482	)	$	204	$	(26	)