Investment Securities

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

5. Investment Securities

Investment securities principally include debt securities the Companyclassifies as available-for-sale and carries at fair value on the Consolidated Balance Sheets, with unrealized gains and losses recorded in Accumulated Other Comprehensive Loss (AOCI), net of income taxes. Realized gains and losses are recognized upon disposition of securities on a trade-date basis in the Consolidated Statements of Incomeusing the specific identification method.

The following is a summary of investment securities as of September 30, 2016 and December 31, 2015:

	2016								2015
				Gross		Gross		Estimated				Gross		Gross		Estimated
				Unrealized		Unrealized		Fair				Unrealized		Unrealized		Fair
Description of Securities (Millions)		Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
State and municipal obligations	$	2,255	$	50	$	―	$	2,305	$	2,813	$	85	$	(5)	$	2,893
U.S. Government agency obligations		12		―		―		12		2		―		―		2
U.S. Government treasury obligations		529		12		―		541		406		4		(1)		409
Corporate debt securities		20		1		―		21		29		1		―		30
Mortgage-backed securities(a)		103		5		―		108		117		4		―		121
Equity securities		1		―		―		1		1		―		―		1
Foreign government bonds and obligations		682		10		―		692		250		6		(1)		255
Other(b)		50		―		(2)		48		50		―		(2)		48
Total	$	3,652	$	78	$	(2)	$	3,728	$	3,668	$	100	$	(9)	$	3,759

• Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
• Other comprises investments in various mutual funds.

The following table provides information about the Company’s investment securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2016 and December 31, 2015:

	2016								2015
	Less than 12 months				12 months or more				Less than 12 months				12 months or more
				Gross				Gross				Gross				Gross
Description of Securities (Millions)		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
State and municipal obligations	$	―	$	―	$	―		―	$	100	$	(3)	$	13	$	(2)
U.S. Government treasury obligations		―		―		―		―		253		(1)		―		―
Foreign government bonds and obligations		―		―		―		―		99		(1)		―		―
Other		―		―		33		(1)		―		―		33		(2)
Total	$	―	$	―	$	33	$	(1)	$	452	$	(5)	$	46	$	(4)

The following table summarizes the gross unrealized losses due to temporary impairments by ratio of fair value to amortized cost as of September 30, 2016 and December 31, 2015:

	Less than 12 months					12 months or more					Total
Ratio of Fair Value to					Gross					Gross					Gross
Amortized Cost	Number of		Estimated		Unrealized	Number of		Estimated		Unrealized	Number of		Estimated		Unrealized
(Dollars in millions)	Securities		Fair Value		Losses	Securities		Fair Value		Losses	Securities		Fair Value		Losses
2016:
90%–100%	―	$	―	$	―	6	$	33	$	(1)	6	$	33	$	(1)
Total as of September 30, 2016	―	$	―	$	―	6	$	33	$	(1)	6	$	33	$	(1)
2015:
90%–100%	52	$	450	$	(5)	15	$	37	$	(2)	67	$	487	$	(7)
Less than 90%	―		―		―	2		9		(2)	2		9		(2)
Total as of December 31, 2015	52	$	450	$	(5)	17	$	46	$	(4)	69	$	496	$	(9)

Overall, for the investment securities in gross unrealized loss positions (i) the Company does not intend to sell the investment securities, (ii) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (iii) the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairment during the periods presented.

Contractual maturities of investment securities with stated maturities as of September 30, 2016 were as follows:

				Estimated
(Millions)		Cost		Fair Value
Due within 1 year	$	788	$	789
Due after 1 year but within 5 years		347		352
Due after 5 years but within 10 years		399		418
Due after 10 years		2,067		2,120
Total	$	3,601	$	3,679

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