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Investment Securities (Tables)
 9 Months Ended
Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities
Our investment portfolio includes various debt and equity securities. Our debt securities, which are classified as available-for-sale and held-to-maturity, include government securities, corporate bonds, asset-backed securities, and mortgage-backed securities. The cost, fair value, and gross unrealized gains and losses on available-for-sale and held-to-maturity debt securities were as follows.
 
 
September 30, 2018
 
December 31, 2017


Amortized cost

Gross unrealized

Fair value

Amortized cost

Gross unrealized

Fair value
($ in millions)

gains

losses

gains

losses

Available-for-sale securities
















Debt securities
















U.S. Treasury and federal agencies

$
2,007


$
—


$
(103
)

$
1,904


$
1,831


$
—


$
(54
)

$
1,777

U.S. States and political subdivisions

887


4


(26
)

865


850


11


(7
)

854

Foreign government

158


—


(3
)

155


153


2


(1
)

154

Agency mortgage-backed residential

16,641


2


(629
)

16,014


14,412


35


(156
)

14,291

Mortgage-backed residential
 
2,670

 
1

 
(110
)
 
2,561

 
2,517

 
11

 
(34
)
 
2,494

Mortgage-backed commercial

632


1


(2
)

631


541


1


(1
)

541

Asset-backed

735


1


(3
)

733


933


4


(1
)

936

Corporate debt

1,302


—


(43
)

1,259


1,262


5


(11
)

1,256

Total available-for-sale securities (a) (b) (c)

$
25,032


$
9


$
(919
)

$
24,122


$
22,499


$
69


$
(265
)

$
22,303

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed residential (d)
 
$
2,197

 
$
—

 
$
(107
)
 
$
2,090

 
$
1,863

 
$
3

 
$
(37
)
 
$
1,829

Asset-backed retained notes
 
49

 
—

 
—

 
49

 
36

 
—

 
—

 
36

Total held-to-maturity securities

$
2,246


$
—


$
(107
)

$
2,139


$
1,899

 
$
3

 
$
(37
)
 
$
1,865

(a)
Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $12 million at both September 30, 2018, and December 31, 2017.
(b)
Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 17 for additional information.
(c)
Available-for-sale securities with a fair value of $5.5 billion and $7.8 billion at September 30, 2018, and December 31, 2017, respectively, were pledged to secure advances from the FHLB, short-term borrowings or repurchase agreements, or for other purposes as required by contractual obligation or law. Under these agreements, we have granted the counterparty the right to sell or pledge $1.4 billion and $1.0 billion of the underlying investment securities at September 30, 2018, and December 31, 2017, respectively.
(d)
Held-to-maturity securities with a fair value of $992 million and $664 million at September 30, 2018, and December 31, 2017, respectively, were pledged to secure advances from the FHLB.
Investments Classified by Contractual Maturity Date
The maturity distribution of debt securities outstanding is summarized in the following tables. Call or prepayment options 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
($ in millions)

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield
September 30, 2018




















Fair value of available-for-sale securities (a)




















U.S. Treasury and federal agencies

$
1,904


1.9
%

$
7


1.7
%

$
932


1.9
%

$
965


1.9
%

$
—


—
%
U.S. States and political subdivisions

865


3.1


44


2.5


57


2.4


257


2.6


507


3.5

Foreign government

155


2.5


18


3.4


61


2.3


73


2.4


3


2.9

Agency mortgage-backed residential
 
16,014

 
3.2

 
—

 
—

 
—

 
—

 
56

 
1.9

 
15,958

 
3.2

Mortgage-backed residential

2,561


3.2


—


—


—


—


—


—


2,561


3.2

Mortgage-backed commercial

631


3.6


—


—


3


3.0


46


3.6


582


3.6

Asset-backed

733


3.3


—


—


533


3.3


99


3.7


101


3.0

Corporate debt

1,259


3.1


134


2.9


515


2.8


582


3.3


28


5.1

Total available-for-sale securities

$
24,122


3.1


$
203


2.8


$
2,101


2.5


$
2,078


2.5


$
19,740


3.3

Amortized cost of available-for-sale securities

$
25,032




$
203




$
2,154




$
2,181




$
20,494



Amortized cost of held-to-maturity securities
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed residential
 
$
2,197

 
3.2
%
 
$
—

 
—
%
 
$
—

 
—
%
 
$
—

 
—
%
 
$
2,197

 
3.2
%
Asset-backed retained notes
 
49

 
2.0

 
—

 
—

 
48

 
2.0

 
1

 
3.3

 
—

 
—

Total held-to-maturity securities
 
$
2,246

 
3.1

 
$
—

 
—

 
$
48

 
2.0

 
$
1

 
3.3

 
$
2,197

 
3.2

December 31, 2017




















Fair value of available-for-sale securities (a)




















U.S. Treasury and federal agencies

$
1,777


1.7
%

$
—


—
%

$
487


1.7
%

$
1,290


1.8
%

$
—


—
%
U.S. States and political subdivisions

854


2.9


76


1.8


36


2.3


203


2.5


539


3.3

Foreign government

154


2.5


—


—


80


2.5


74


2.4


—


—

Agency mortgage-backed residential
 
14,291

 
3.1

 
—

 
—

 
—

 
—

 
3

 
2.9

 
14,288

 
3.1

Mortgage-backed residential

2,494


3.1


—


—


—


—


—


—


2,494


3.1

Mortgage-backed commercial

541


3.2


—


—


30


3.1


31


3.1


480


3.2

Asset-backed

936


3.1


—


—


698


3.1


106


3.1


132


2.8

Corporate debt

1,256


2.9


140


2.6


513


2.6


564


3.2


39


4.7

Total available-for-sale securities

$
22,303


3.0


$
216


2.3


$
1,844


2.5


$
2,271


2.3


$
17,972


3.1

Amortized cost of available-for-sale securities

$
22,499





$
217





$
1,852





$
2,314





$
18,116




Amortized cost of held-to-maturity securities

 






















Agency mortgage-backed residential
 
$
1,863

 
3.1
%
 
$
—

 
—
%
 
$
—

 
—
%
 
$
—

 
—
%
 
$
1,863

 
3.1
%
Asset-backed retained notes
 
36

 
1.7

 
—

 
—

 
35

 
1.7

 
1

 
3.0

 
—

 
—

Total held-to-maturity securities
 
$
1,899

 
3.1

 
$
—

 
—

 
$
35

 
1.7

 
$
1

 
3.0

 
$
1,863

 
3.1

(a)
Yield is calculated using the effective yield of each security at the end of the period, weighted based on the market value. The effective yield considers the contractual coupon and amortized cost, and excludes expected capital gains and losses.
Investment Income
The following table presents interest and dividends on investment securities.
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)
2018
 
2017
 
2018
 
2017
Taxable interest
$
172


$
141

 
$
490

 
$
390

Taxable dividends
4


3

 
10

 
8

Interest and dividends exempt from U.S. federal income tax
6


6

 
18

 
17

Interest and dividends on investment securities
$
182


$
150

 
$
518

 
$
415
Schedule of Realized Gain (Loss)
The following table presents gross gains and losses realized upon the sales of available-for-sale securities, and net gains or losses on equity securities held during the period. There were no other-than-temporary impairments of available-for-sale securities for either period.
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)
2018
 
2017
 
2018
 
2017
Available-for-sale securities
 
 
 
 
 
 
 
Gross realized gains
$
1

 
$
24

 
$
8

 
$
75

Gross realized losses (a)
—

 
(1
)
 
—

 
(2
)
Net realized gains on available-for-sale securities
1

 
23

 
8

 
73

Net realized gain on equity securities
15

 
 
 
55

 
 
Net unrealized gain (loss) on equity securities (b)
6

 
 
 
(26
)
 
 
Other gain on investments, net
$
22

 
$
23

 
$
37

 
$
73


(a)
Certain available-for-sale securities were sold at a loss in 2018 and 2017 as a result of market conditions within these respective periods (e.g., a downgrade in the rating of a debt security). Any such sales were made in accordance with our risk-management policies and practices.
(b)
As a result of our adoption of ASU 2016-01, beginning January 1, 2018, changes in the fair value of our portfolio of equity securities are recognized in net income. Prior to adoption, equity securities were included in our available-for-sale portfolio and unrealized changes in fair value were recognized through other comprehensive (loss) income until realized, at which point we recorded a gain or loss on sale. We adopted ASU 2016-01 on January 1, 2018, on a modified retrospective basis with a cumulative effect adjustment as of the beginning of the fiscal year of initial adoption. Refer to the section titled Recently Adopted Accounting Standards in Note 1 for additional information.
Schedule of Unrealized Loss on Investments
The table below summarizes available-for-sale and held-to-maturity securities in an unrealized loss position, which we evaluated for other than temporary impairment applying the methodology described in Note 1. As of September 30, 2018, we did not have the intent to sell the available-for-sale or held-to-maturity securities with an unrealized loss position and we do not believe it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As a result of this evaluation, we believe that the securities with an unrealized loss position are not considered to be other-than-temporarily impaired at September 30, 2018.
 
 
September 30, 2018
 
December 31, 2017


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

$
268


$
(5
)

$
1,635


$
(98
)

$
471


$
(8
)

$
1,305


$
(46
)
U.S. States and political subdivisions

504


(12
)

211


(14
)

242


(2
)

183


(5
)
Foreign government

73


(2
)

30


(1
)

80


(1
)

4


—

Agency mortgage-backed residential
 
9,600

 
(258
)
 
5,991

 
(371
)
 
4,066

 
(19
)
 
5,671

 
(137
)
Mortgage-backed residential

1,701


(49
)

711


(61
)

857


(2
)

773


(32
)
Mortgage-backed commercial
 
60

 
(1
)
 
20

 
(1
)
 
76

 
(1
)
 
21

 
—

Asset-backed

410


(2
)

76


(1
)

220


(1
)

91


—

Corporate debt

897


(23
)

312


(20
)

529


(4
)

194


(7
)
Total temporarily impaired available-for-sale securities

$
13,513


$
(352
)

$
8,986


$
(567
)

$
6,541


$
(38
)

$
8,242


$
(227
)
Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed residential
 
$
940

 
$
(25
)
 
$
1,116

 
$
(82
)
 
$
773

 
$
(5
)
 
$
687

 
$
(32
)
Asset-backed retained notes
 
22

 
—

 
17

 
—

 
35

 
—

 
—

 
—

Total held-to-maturity debt securities
 
$
962


$
(25
)

$
1,133


$
(82
)

$
808


$
(5
)

$
687


$
(32
)