Investment Securities

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



	September 30, 2015									December 31, 2014
	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	$	1,805	$	5	$	(1	)	$	1,809	$	1,195	$	1	$	(18	)	$	1,178
U.S. States and political subdivisions	635		17		(1		)	651		389		17		—			406
Foreign government	176		8		—			184		224		8		—			232
Mortgage-backed residential (a)	11,560		130		(76		)	11,614		10,431		119		(125		)	10,425
Mortgage-backed commercial	519		—		(2		)	517		254		—		(1		)	253
Asset-backed	1,947		6		(2		)	1,951		1,989		5		(3		)	1,991
Corporate debt	1,043		13		(9		)	1,047		734		14		(2		)	746
Total debt securities (b) (c)	17,685		179		(91		)	17,773		15,216		164		(149		)	15,231
Equity securities	1,097		1		(113		)	985		891		49		(34		)	906
Total available-for-sale securities	$	18,782	$	180	$	(204	)	$	18,758	$	16,107	$	213	$	(183	)	$	16,137


(a)	Residential mortgage-backed securities include agency-backed bonds totaling $8,536 million and $7,557 million at September 30, 2015, and December 31, 2014, respectively.


(b)	Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. Amounts deposited totaled $15 million at both September 30, 2015, and December 31, 2014.


(c)	Investment securities with a fair value of $1,702 million and $801 million at September 30, 2015, and December 31, 2014, were pledged to secure short-term borrowings or repurchase agreements and for other purposes as required by contractual obligation or law. Under these agreements, Ally has granted the counterparty the right to sell or pledge the underlying investment securities.

The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from contractual 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
September 30, 2015
Fair value of available-for-sale debt securities
U.S. Treasury and federal agencies	$	1,809	1.6	%	$	7	5.0	%	$	905	1.2	%	$	897	2.1	%	$	—	—	%
U.S. States and political subdivisions	651		3.3		53		2.2		48		2.2		130		2.9		420		3.7
Foreign government	184		2.6		9		1.4		82		2.7		93		2.7		—		—
Mortgage-backed residential	11,614		2.8		—		—		38		2.1		40		2.5		11,536		2.8
Mortgage-backed commercial	517		1.9		—		—		—		—		3		2.7		514		1.9
Asset-backed	1,951		2.1		4		1.4		1,189		2.0		553		2.4		205		2.2
Corporate debt	1,047		2.9		48		3.1		601		2.5		368		3.3		30		5.5
Total available-for-sale debt securities	$	17,773	2.6		$	121	2.6		$	2,863	1.9		$	2,084	2.5		$	12,705	2.8
Amortized cost of available-for-sale debt securities	$	17,685			$	120			$	2,854			$	2,067			$	12,644
December 31, 2014
Fair value of available-for-sale debt securities
U.S. Treasury and federal agencies	$	1,178	1.5	%	$	7	3.0	%	$	677	1.2	%	$	494	1.9	%	$	—	—	%
U.S. States and political subdivisions	406		3.7		34		1.9		12		2.1		106		3.0		254		4.3
Foreign government	232		2.7		—		—		128		2.5		104		2.9		—		—
Mortgage-backed residential	10,425		2.6		34		3.1		58		2.1		—		—		10,333		2.6
Mortgage-backed commercial	253		1.5		—		—		30		1.8		—		—		223		1.4
Asset-backed	1,991		1.9		—		—		1,311		1.9		463		2.0		217		2.2
Corporate debt	746		3.2		33		3.1		460		2.7		216		3.8		37		5.6
Total available-for-sale debt securities	$	15,231	2.5		$	108	2.7		$	2,676	1.9		$	1,383	2.4		$	11,064	2.6
Amortized cost of available-for-sale debt securities	$	15,216			$	108			$	2,674			$	1,374			$	11,060


(a)	Actual maturities may differ from contractual maturities due to call or prepayment options.

The balances of cash equivalents were $1.3 billion and $2.0 billion at September 30, 2015, and December 31, 2014, respectively, and were composed primarily of money market accounts and short-term securities, including U.S. Treasury bills.

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



	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2015		2014		2015		2014
Taxable interest	$	90	$	87	$	252	$	256
Taxable dividends	7		6		18		18
Interest and dividends exempt from U.S. federal income tax	5		1		13		8
Interest and dividends on available-for-sale securities	$	102	$	94	$	283	$	282

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 September 30,						Nine months ended September 30,
($ in millions)	2015			2014			2015			2014
Gross realized gains	$	28		$	48		$	134		$	150
Gross realized losses	(11		)	(3		)	(14		)	(11		)
Other-than-temporary impairment	(11		)	—			(14		)	(10		)
Other gain on investments, net	$	6		$	45		$	106		$	129

Certain available-for-sale securities were sold at a loss in 2015 and 2014 as a result of market conditions within these respective periods (e.g., a downgrade in the rating of a debt security), in accordance with our risk management policies and practices. The table below summarizes available-for-sale securities in an unrealized loss position in accumulated other comprehensive income. Based on the methodology 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 September 30, 2015, 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 September 30, 2015, 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 September 30, 2015. Refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K for additional information related to investment securities and our methodology for evaluating potential other-than-temporary impairments.



	September 30, 2015										December 31, 2014
	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	$	220	$	—		$	373	$	(1	)	$	297	$	(3	)	$	859	$	(15	)
U.S. States and political subdivisions	173		(1		)	—		—			50		—			—		—
Foreign government	9		—			—		—			—		—			—		—
Mortgage-backed	1,731		(11		)	2,517		(67		)	1,172		(10		)	3,098		(116		)
Asset-backed	696		(2		)	24		—			819		(3		)	8		—
Corporate debt	449		(8		)	10		(1		)	132		(2		)	11		—
Total temporarily impaired debt securities	3,278		(22		)	2,924		(69		)	2,470		(18		)	3,976		(131		)
Temporarily impaired equity securities	793		(84		)	68		(29		)	231		(24		)	40		(10		)
Total temporarily impaired available-for-sale securities	$	4,071	$	(106	)	$	2,992	$	(98	)	$	2,701	$	(42	)	$	4,016	$	(141	)