INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investment securities classified as current and long-term were as follows at September 30, 2020 and December 31, 2019, respectively:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
September 30, 2020
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	1,195	$	2	$	(1)	$	1,196
Mortgage-backed securities	3,511		183		(2)		3,692
Tax-exempt municipal securities	1,439		40		(3)		1,476


Commercial mortgage-backed securities	1,020		54		(1)		1,073
Asset-backed securities	1,278		8		(5)		1,281
Corporate debt securities	4,199		218		(2)		4,415
Total debt securities	$	12,642	$	505	$	(14)	13,133
Common stock							713
Total investment securities							$	13,846

December 31, 2019
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	353	$	1	$	—	$	354
Mortgage-backed securities	3,628		85		(3)		3,710
Tax-exempt municipal securities	1,433		30		—		1,463


Commercial mortgage-backed securities	786		18		—		804
Asset-backed securities	1,093		3		(3)		1,093
Corporate debt securities	3,867		82		(2)		3,947
Total debt securities	$	11,160	$	219	$	(8)	11,371
Common stock							7
Total investment securities							$	11,378

Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position were as follows at September 30, 2020 and December 31, 2019, respectively:


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
September 30, 2020
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	662	$	(1)	$	—	$	—	$	662	$	(1)
Mortgage-backed securities	450		(2)		—		—		450		(2)
Tax-exempt municipal securities	127		(3)		12		—		139		(3)


Commercial mortgage-backed securities	181		—		36		(1)		217		(1)
Asset-backed securities	121		(1)		537		(4)		658		(5)
Corporate debt securities	275		(1)		98		(1)		373		(2)
Total debt securities	$	1,816	$	(8)	$	683	$	(6)	$	2,499	$	(14)

December 31, 2019
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	48	$	—	$	23	$	—	$	71	$	—
Mortgage-backed securities	315		(1)		204		(2)		519		(3)
Tax-exempt municipal securities	58		—		75		—		133		—


Commercial mortgage-backed securities	118		—		36		—		154		—
Asset-backed securities	20		—		607		(3)		627		(3)
Corporate debt securities	589		(2)		155		—		744		(2)
Total debt securities	$	1,148	$	(3)	$	1,100	$	(5)	$	2,248	$	(8)

Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at September 30, 2020. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types.

Our unrealized losses from all debt securities were generated from approximately 155 positions out of a total of approximately 1,530 positions at September 30, 2020. All issuers of debt securities we own that were trading at an unrealized loss at September 30, 2020 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time these debt securities were purchased. At September 30, 2020, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis. Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position for the three and nine months ended September 30, 2020.

The detail of gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2020 and 2019:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	(in millions)
Gross gains on investment securities	$	645	$	41	$	714	$	59
Gross losses on investment securities	—		(23)		(18)		(36)
Net gains on investment securities	$	645	$	18	$	696	$	23

Gross gain on investment securities includes both the gain resulting from the initial conversion of our prior ownership interest in certain privately held companies into common stock upon such companies' initial public offering, or IPO, during the three months ended September 30, 2020, and subsequent changes in the market value of such securities from the IPO through the end of the period, which combined to total $643 million for the three and nine months ended September 30, 2020.

All purchases of and proceeds from investment securities for the three and nine months ended September 30, 2020 and 2019 relate to debt securities.

There were no material other-than-temporary impairments for the three and nine months ended September 30, 2019.

The contractual maturities of debt securities available for sale at September 30, 2020, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	1,487	$	1,490
Due after one year through five years	2,176		2,259
Due after five years through ten years	1,999		2,128
Due after ten years	1,171		1,210
Mortgage and asset-backed securities	5,809		6,046
Total debt securities	$	12,642	$	13,133