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SECURITIES (Tables)
 9 Months Ended
Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Schedule of securities held
The following table presents the major components of securities at amortized cost and fair value:
 
September 30, 2018
 
December 31, 2017
(in millions)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
 
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
Debt Securities Available for Sale, at Fair Value
 
 
 
 
 
 
 
 
 
U.S. Treasury and other

$12


$—


$—


$12

 

$12


$—


$—


$12

State and political subdivisions
5

—

—

5

 
6

—

—

6

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
20,703

8

(825
)
19,886

 
20,065

40

(277
)
19,828

Other/non-agency
251

4

(6
)
249

 
311

7

(7
)
311

Total mortgage-backed securities
20,954

12

(831
)
20,135

 
20,376

47

(284
)
20,139

Total debt securities available for sale, at fair value

$20,971


$12


($831
)

$20,152

 

$20,394


$47


($284
)

$20,157

Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
Federal agencies and U.S. government sponsored entities

$3,525


$—


($177
)

$3,348

 

$3,853


$7


($46
)

$3,814

Other/non-agency
759

1

(6
)
754

 
832

22

—

854

Total mortgage-backed securities
4,284

1

(183
)
4,102

 
4,685

29

(46
)
4,668

Total debt securities held to maturity

$4,284


$1


($183
)

$4,102

 

$4,685


$29


($46
)

$4,668

Equity Securities, at Fair Value
 
 
 
 
 
 
 
 
 
Money market mutual fund investments

$175


$—


$—


$175

 

$165


$—


$—


$165

Other investments
—

—

—

—

 
4

—

—

4

Total equity securities, at fair value

$175


$—


$—


$175

 

$169


$—


$—


$169

Equity Securities, at Cost
 
 
 
 
 
 
 
 
 
Federal Reserve Bank stock

$463


$—


$—


$463

 

$463


$—


$—


$463

Federal Home Loan Bank stock
404

—

—

404

 
252

—

—

252

Other equity securities
7

—

—

7

 
7

—

—

7

Total equity securities, at cost

$874


$—


$—


$874

 

$722


$—


$—


$722
Schedule of investments classified by maturity date
The amortized cost and fair value of debt securities by contractual maturity as of September 30, 2018 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.
 
September 30, 2018
 
Distribution of Maturities
(in millions)
1 Year or Less
1-5 Years
5-10 Years
After 10 Years
Total

Amortized Cost:
 
 
 
 
 
Debt securities available for sale
 
 
 
 
 
U.S. Treasury and other

$12


$—


$—


$—


$12

State and political subdivisions
—

—

—

5

5

Mortgage-backed securities:
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
—

312

1,595

18,796

20,703

Other/non-agency
2

11

—

238

251

Total debt securities available for sale
14

323

1,595

19,039

20,971

Debt securities held to maturity
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
—

—

—

3,525

3,525

Other/non-agency
—

—

—

759

759

Total debt securities held to maturity
—

—

—

4,284

4,284

Total amortized cost of debt securities

$14


$323


$1,595


$23,323


$25,255

 
 
 
 
 
 
Fair Value:
 
 
 
 
 
Debt securities available for sale
 
 
 
 
 
U.S. Treasury and other

$12


$—


$—


$—


$12

State and political subdivisions
—

—

—

5

5

Mortgage-backed securities:
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
—

306

1,555

18,025

19,886

Other/non-agency
2

11

—

236

249

Total debt securities available for sale
14

317

1,555

18,266

20,152

Debt securities held to maturity
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
—

—

—

3,348

3,348

Other/non-agency
—

—

—

754

754

Total debt securities held to maturity
—

—

—

4,102

4,102

Total fair value of debt securities

$14


$317


$1,555


$22,368


$24,254
Schedule of income recognized on investment securities
Realized gains and losses on securities are presented below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2018

 
2017

 
2018

 
2017

Gains on sale of debt securities

$3

 

$2

 

$13

 

$9

Losses on sale of debt securities
—

 
—

 
—

 
—

Debt securities gains, net

$3

 

$2

 

$13

 

$9

Equity securities gains

$—

 

$—

 

$—

 

$1
Schedule of financial instruments owned and pledged as collateral
The amortized cost and fair value of debt securities pledged are presented below:
 
September 30, 2018
 
December 31, 2017
(in millions)
Amortized Cost
Fair Value

 
Amortized Cost
Fair Value

Pledged against repurchase agreements

$391


$376

 

$358


$357

Pledged against FHLB borrowed funds
764

760

 
839

861

Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law
3,699

3,519

 
3,113

3,082
Schedule of unrealized loss on investments
The following tables present mortgage-backed debt securities whose fair values are below carrying values, segregated by those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer:
 
September 30, 2018
 
Less than 12 Months
 
12 Months or Longer
 
Total
(dollars in millions)
Number of Issues
Fair Value
Gross Unrealized Losses
 
Number of Issues
Fair Value
Gross Unrealized Losses
 
Number of Issues
Fair Value
Gross Unrealized Losses
Federal agencies and U.S. government sponsored entities
493


$15,177


($514
)
 
159


$7,215


($488
)
 
652


$22,392


($1,002
)
Other/non-agency
14

542

(6
)
 
11

76

(6
)
 
25

618

(12
)
Total
507


$15,719


($520
)
 
170


$7,291


($494
)
 
677


$23,010


($1,014
)

 
December 31, 2017
 
Less than 12 Months
 
12 Months or Longer
 
Total
(dollars in millions)
Number of Issues
Fair Value
Gross Unrealized Losses
 
Number of Issues
Fair Value
Gross Unrealized Losses
 
Number of Issues
Fair Value
Gross Unrealized Losses
Federal agencies and U.S. government sponsored entities
294


$10,163


($97
)
 
152


$8,061


($226
)
 
446


$18,224


($323
)
Other/non-agency
6

55

(1
)
 
10

84

(6
)
 
16

139

(7
)
Total
300


$10,218


($98
)
 
162


$8,145


($232
)
 
462


$18,363


($330
)
Schedule of credit losses recognized in earnings
The following table presents the cumulative credit-related losses recognized in earnings on debt securities held by the Company:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2018

 
2017

 
2018

 
2017

Cumulative balance at beginning of period

$81

 

$79

 

$80

 

$75

Credit impairments recognized in earnings on debt securities that have been previously impaired
1

 
1

 
3

 
6

Reductions due to increases in cash flow expectations on impaired debt securities(1)
(1
)
 
—

 
(2
)
 
(1
)
Cumulative balance at end of period

$81

 

$80

 

$81

 

$80


(1) Reported in interest income from investment securities on the Consolidated Statements of Operations.