Securities

In conjunction with the adoption of new accounting standards, an immaterial amount of HTM securities was transferred to AFS securities and an immaterial amount of equity securities was transferred from AFS securities to other assets in the first quarter of 2018. The following tables present the amortized cost, gross unrealized gains and losses, and fair values of AFS and HTM securities:



March 31, 2018	Amortized Cost		Gross Unrealized				Fair Value
(Dollars in millions)	Amortized Cost		Gains		Losses		Fair Value
AFS securities:
U.S. Treasury	$	2,441	$	—	$	106	$	2,335
GSE	187		—		11		176
Agency MBS	21,605		3		921		20,687
States and political subdivisions	1,194		28		23		1,199
Non-agency MBS	363		215		—		578
Other	41		1		—		42
Total AFS securities	$	25,831	$	247	$	1,061	$	25,017

HTM securities:
U.S. Treasury	$	1,098	$	—	$	4	$	1,094
GSE	2,198		5		50		2,153
Agency MBS	19,069		30		542		18,557
States and political subdivisions	24		—		—		24
Other	1		—		—		1
Total HTM securities	$	22,390	$	35	$	596	$	21,829



December 31, 2017	Amortized Cost		Gross Unrealized				Fair Value
(Dollars in millions)	Amortized Cost		Gains		Losses		Fair Value
AFS securities:
U.S. Treasury	$	2,368	$	—	$	77	$	2,291
GSE	187		—		8		179
Agency MBS	20,683		8		590		20,101
States and political subdivisions	1,379		37		24		1,392
Non-agency MBS	384		192		—		576
Other	8		—		—		8
Total AFS securities	$	25,009	$	237	$	699	$	24,547

HTM securities:
U.S. Treasury	$	1,098	$	8	$	—	$	1,106
GSE	2,198		11		22		2,187
Agency MBS	19,660		33		222		19,471
States and political subdivisions	28		—		—		28
Other	43		2		—		45
Total HTM securities	$	23,027	$	54	$	244	$	22,837

Certain investments in marketable debt securities and MBS issued by FNMA and FHLMC exceeded 10% of shareholders' equity at March 31, 2018. The FNMA investments had total amortized cost and fair value of $14.6 billion and $14.0 billion, respectively. The FHLMC investments had total amortized cost and fair value of $10.5 billion and $10.1 billion, respectively.

Changes in credit losses on securities with OTTI where a portion of the unrealized loss was recognized in OCI were immaterial for all periods presented.

The amortized cost and estimated fair value of the securities portfolio by contractual maturity are shown in the following table. The expected life of MBS may differ from contractual maturities because borrowers have the right to prepay the underlying mortgage loans with or without prepayment penalties.



March 31, 2018	AFS				HTM
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	462	$	460	$	—	$	—
Due after one year through five years	544		534		2,699		2,665
Due after five years through ten years	2,266		2,161		863		840
Due after ten years	22,559		21,862		18,828		18,324
Total debt securities	$	25,831	$	25,017	$	22,390	$	21,829

The following tables present the fair values and gross unrealized losses of investments based on the length of time that individual securities have been in a continuous unrealized loss position:



March 31, 2018	Less than 12 months				12 months or more				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AFS securities:
U.S. Treasury	$	697	$	9	$	1,637	$	97	$	2,334	$	106
GSE	9		—		167		11		176		11
Agency MBS	7,304		198		13,273		723		20,577		921
States and political subdivisions	203		1		343		22		546		23
Total	$	8,213	$	208	$	15,420	$	853	$	23,633	$	1,061

HTM securities:
U.S. Treasury	$	1,094	$	4	$	—	$	—	$	1,094	$	4
GSE	1,455		37		287		13		1,742		50
Agency MBS	12,396		313		4,339		229		16,735		542
Total	$	14,945	$	354	$	4,626	$	242	$	19,571	$	596



December 31, 2017	Less than 12 months				12 months or more				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AFS securities:
U.S. Treasury	$	634	$	4	$	1,655	$	73	$	2,289	$	77
GSE	9		—		170		8		179		8
Agency MBS	5,077		64		13,920		526		18,997		590
States and political subdivisions	201		1		355		23		556		24
Total	$	5,921	$	69	$	16,100	$	630	$	22,021	$	699

HTM securities:
GSE	$	1,470	$	12	$	290	$	10	$	1,760	$	22
Agency MBS	10,880		77		4,631		145		15,511		222
Total	$	12,350	$	89	$	4,921	$	155	$	17,271	$	244

The unrealized losses on U.S. Treasury securities, GSE securities and Agency MBS were the result of increases in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans.

At March 31, 2018, the majority of the unrealized loss on states and political subdivisions securities was the result of fair value hedge basis adjustments that are a component of amortized cost. These securities are evaluated for credit impairment through a qualitative analysis of issuer performance and the primary source of repayment. At March 31, 2018, none of these securities had credit impairment.