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SECURITIES (Tables)
 6 Months Ended
Jun. 30, 2019
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:
 
June 30, 2019
 
December 31, 2018
(in millions)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
 
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
U.S. Treasury and other

$90


$—


$—


$90

 

$24


$—


$—


$24

State and political subdivisions
5

—

—

5

 
5

—

—

5

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
Federal agencies and U.S. government sponsored entities
20,688

163

(143
)
20,708

 
20,211

28

(605
)
19,634

Other/non-agency
871

28

(4
)
895

 
236

3

(7
)
232

Total mortgage-backed securities, at fair value
21,559

191

(147
)
21,603

 
20,447

31

(612
)
19,866

Total debt securities available for sale, at fair value

$21,654


$191


($147
)

$21,698

 

$20,476


$31


($612
)

$19,895

Federal agencies and U.S. government sponsored entities

$3,447


$18


($24
)

$3,441

 

$3,425


$—


($132
)

$3,293

Other/non-agency
—

—

—

—

 
740

8

—

748

Total mortgage-backed securities, at cost
3,447

18

(24
)
3,441

 
4,165

8

(132
)
4,041

Total debt securities held to maturity

$3,447


$18


($24
)

$3,441

 

$4,165


$8


($132
)

$4,041

Money market mutual fund investments

$47


$—


$—


$47

 

$181


$—


$—


$181

Total equity securities, at fair value

$47


$—


$—


$47

 

$181


$—


$—


$181

Federal Reserve Bank stock

$577


$—


$—


$577

 

$463


$—


$—


$463

Federal Home Loan Bank stock
121

—

—

121

 
364

—

—

364

Other equity securities
8

—

—

8

 
7

—

—

7

Total equity securities, at cost

$706


$—


$—


$706

 

$834


$—


$—


$834
Schedule of investments classified by maturity date
The amortized cost and fair value of debt securities by contractual maturity as of June 30, 2019 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.
 
June 30, 2019
 
Distribution of Maturities
(in millions)
1 Year or Less
1-5 Years
5-10 Years
After 10 Years
Total

Amortized cost:
 
 
 
 
 
U.S. Treasury and other

$90


$—


$—


$—


$90

State and political subdivisions
—

—

—

5

5

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

221

1,717

18,750

20,688

Other/non-agency
5

2

—

864

871

Total debt securities available for sale
95

223

1,717

19,619

21,654

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

—

—

3,447

3,447

Total debt securities held to maturity
—

—

—

3,447

3,447

Total amortized cost of debt securities

$95


$223


$1,717


$23,066


$25,101

 
 
 
 
 
 
Fair value:
 
 
 
 
 
U.S. Treasury and other

$90


$—


$—


$—


$90

State and political subdivisions
—

—

—

5

5

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

219

1,735

18,754

20,708

Other/non-agency
5

3

—

887

895

Total debt securities available for sale
95

222

1,735

19,646

21,698

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

—

—

3,441

3,441

Total debt securities held to maturity
—

—

—

3,441

3,441

Total fair value of debt securities

$95


$222


$1,735


$23,087


$25,139
Schedule of income recognized on investment securities
Realized gains and losses on securities are presented below:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
2019

 
2018

 
2019

 
2018

Gains on sale of debt securities(1)

$8

 

$2

 

$16

 

$10

Losses on sale of debt securities
—

 
—

 
—

 
—

Debt securities gains, net

$8

 

$2

 

$16

 

$10


(1) For the three and six months ended June 30, 2019, $4 million of gains on sale of debt securities were recognized in mortgage banking fees in the Consolidated Statement of Operations as they related to AFS securities held as economic hedges of the value of the MSR portfolio recognized using the amortization method.    
Schedule of financial instruments owned and pledged as collateral

The amortized cost and fair value of debt securities pledged are presented below:
 
June 30, 2019
 
December 31, 2018
(in millions)
Amortized Cost
Fair Value

 
Amortized Cost
Fair Value

Pledged against repurchase agreements

$291


$293

 

$344


$338

Pledged against FHLB borrowed funds
—

—

 
745

752

Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law
3,632

3,613

 
3,592

3,460
Schedule of unrealized loss on investments
The following tables present mortgage-backed debt securities whose fair values are below carrying values, separated by the duration the securities have been in a continuous unrealized loss position:
 
June 30, 2019
 
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
19


$882


($1
)
 
349


$11,307


($166
)
 
368


$12,189


($167
)
Other/non-agency
—

—

—

 
7

41

(4
)
 
7

41

(4
)
Total
19


$882


($1
)
 
356


$11,348


($170
)
 
375


$12,230


($171
)

 
December 31, 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
166


$4,881


($89
)
 
429


$15,124


($648
)
 
595


$20,005


($737
)
Other/non-agency
10

139

(1
)
 
11

72

(6
)
 
21

211

(7
)
Total
176


$5,020


($90
)
 
440


$15,196


($654
)
 
616


$20,216


($744
)
Schedule of credit losses recognized in earnings
The following table presents the cumulative credit-related losses recognized in earnings on the Company’s debt securities:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
2019

 
2018

 
2019

 
2018

Cumulative balance at beginning of period

$78

 

$80

 

$81

 

$80

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

 
1

 
1

 
2

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

 
—

 
—

 
(1
)
Reductions for securities sold or matured during the period
(21
)
 
—

 
(25
)
 
—

Cumulative balance at end of period

$57

 

$81

 

$57

 

$81


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