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Investment Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Investment securities principally include available-for-sale debt securities carried at fair value on the Consolidated Balance Sheets, with unrealized gains and losses recorded in AOCI, net of income taxes. Realized gains and losses are recognized upon disposition of the securities using the specific identification method.
Investment securities also include equity securities carried at fair value on the Consolidated Balance Sheets. The unrealized gains and losses on equity securities are recorded in the Consolidated Statements of Income.
The following is a summary of investment securities as of June 30, 2019 and December 31, 2018:
 
 
2019
 
2018
Description of Securities
(Millions)
 
Cost

 
Gross
Unrealized
Gains

 
Gross
Unrealized
Losses

 
Estimated
Fair
Value

 
Cost

 
Gross
Unrealized
Gains

 
Gross
Unrealized
Losses

 
Estimated
Fair
Value

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal obligations
 
$
324

 
$
9

 
$
—

 
$
333

 
$
594

 
$
4

 
$
(2
)
 
$
596

U.S. Government agency obligations
 
10

 
—

 
—

 
10

 
10

 
—

 
—

 
10

U.S. Government treasury obligations
 
7,383

 
38

 
(3
)
 
7,418

 
3,452

 
5

 
(17
)
 
3,440

Corporate debt securities
 
28

 
—

 
—

 
28

 
28

 
—

 
—

 
28

Mortgage-backed securities (a)
 
45

 
2

 
—

 
47

 
50

 
1

 
—

 
51

Foreign government bonds and obligations
 
620

 
1

 
—

 
621

 
474

 
—

 
—

 
474

Equity securities (b)
 
61

 
27

(c)

(3
)
 
85

 
51

 
—

 
(3
)
 
48

Total
 
$
8,471

 
$
77

 
$
(6
)
 
8,542

 
$
4,659

 
$
10

 
$
(22
)
 
$
4,647

(a)
Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
(b)
Equity securities comprise investments in common stock and mutual funds.
(c)
During the second quarter of 2019, an equity investment was reclassified from Other assets to Investment securities following the completion of an initial public offering by the issuer of the securities. The investment had a fair value of $37 million with an associated cost basis of $10 million as of June 30, 2019. The gross unrealized gains amount includes $29 million that was recognized during 2018.
The following table provides information about our investment securities with gross unrealized losses and the length of time that individual securities have been in an unrealized loss position as of June 30, 2019 and December 31, 2018:
 
 
2019
 
2018
 
 
Less than 12 months
 
12 months or more
 
Less than 12 months
 
12 months or more
Description of Securities
(Millions)
 
Estimated Fair Value

 
Gross
Unrealized
Losses

 
Estimated Fair Value

 
Gross
Unrealized
Losses

 
Estimated Fair Value

 
Gross
Unrealized
Losses

 
Estimated Fair Value

 
Gross
Unrealized
Losses

State and municipal obligations
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
82

 
$
(1
)
U.S. Government treasury obligations
 
—

 
—

 
477

 
(3
)
 
224

 
(2
)
 
791

 
(15
)
Total
 
$
—

 
$
—

 
$
477

 
$
(3
)
 
$
224

 
$
(2
)
 
$
873

 
$
(16
)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of June 30, 2019 and December 31, 2018:
 
 
Less than 12 months
 
12 months or more
 
Total
Ratio of Fair Value to Amortized Cost
(Dollars in millions)
 
Number of
Securities

 
Estimated
Fair Value

 
Gross
Unrealized
Losses

 
Number of
Securities

 
Estimated
Fair Value

 
Gross
Unrealized
Losses

 
Number of
Securities

 
Estimated
Fair Value

 
Gross
Unrealized
Losses

2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90%–100%
 
—

 
$
—

 
$
—

 
7

 
$
477

 
$
(3
)
 
7

 
$
477

 
$
(3
)
Total as of June 30, 2019
 
—

 
$
—

 
$
—

 
7

 
$
477

 
$
(3
)
 
7

 
$
477

 
$
(3
)
2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90%–100%
 
2

 
$
224

 
$
(2
)
 
29

 
$
873

 
$
(16
)
 
31

 
$
1,097

 
$
(18
)
Total as of December 31, 2018
 
2

 
$
224

 
$
(2
)
 
29

 
$
873

 
$
(16
)
 
31

 
$
1,097

 
$
(18
)

The gross unrealized losses for available-for-sale debt securities are attributed to wider credit spreads for specific issuers, adverse changes in benchmark interest rates, or a combination thereof, all compared to those prevailing when the investment securities were purchased.
Overall, for the available-for-sale debt securities in gross unrealized loss positions, (i) we do not intend to sell the securities, (ii) it is more likely than not that we will not be required to sell the securities before recovery of the unrealized losses, and (iii) we expect that the contractual principal and interest will be received on the securities. As a result, we recognized no other-than-temporary impairment during the periods presented.
Contractual maturities for investment securities with stated maturities as of June 30, 2019 were as follows:
(Millions)
 
Cost

 
Estimated
Fair Value

Due within 1 year
 
$
6,635

 
$
6,644

Due after 1 year but within 5 years
 
1,307

 
1,331

Due after 5 years but within 10 years
 
190

 
196

Due after 10 years
 
278

 
286

Total
 
$
8,410

 
$
8,457


The expected payments on state and municipal obligations, U.S. government agency obligations and mortgage-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.