Investment Securities (Tables)

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

The following table presents the amortized cost and fair value, and associated unrealized gains and losses, of investment securities as of the dates indicated:



	June 30, 2014								December 31, 2013
	Amortized Cost		Gross Unrealized				Fair Value		Amortized Cost		Gross Unrealized				Fair Value
(In millions)			Gains		Losses						Gains		Losses
Available for sale:
U.S. Treasury and federal agencies:
Direct obligations	$	3,403	$	33	$	1	$	3,435	$	702	$	9	$	2	$	709
Mortgage-backed securities	22,067		235		163		22,139		23,744		211		392		23,563
Asset-backed securities:
Student loans⁽¹⁾	13,985		135		158		13,962		14,718		92		268		14,542
Credit cards	6,580		20		34		6,566		8,230		21		41		8,210
Sub-prime	1,172		3		74		1,101		1,291		3		91		1,203
Other	4,523		126		14		4,635		4,949		138		23		5,064
Total asset-backed securities	26,260		284		280		26,264		29,188		254		423		29,019
Non-U.S. debt securities:
Mortgage-backed securities	11,231		207		3		11,435		10,808		230		9		11,029
Asset-backed securities	4,181		20		1		4,200		5,369		23		2		5,390
Government securities	3,819		4		—		3,823		3,759		2		—		3,761
Other	5,699		66		8		5,757		4,679		59		11		4,727
Total non-U.S. debt securities	24,930		297		12		25,215		24,615		314		22		24,907
State and political subdivisions	10,400		289		72		10,617		10,301		160		198		10,263
Collateralized mortgage obligations	5,321		83		30		5,374		5,275		70		76		5,269
Other U.S. debt securities	4,706		145		9		4,842		4,876		138		34		4,980
U.S. equity securities	29		8		—		37		28		6		—		34
Non-U.S. equity securities	1		—		—		1		1		—		—		1
U.S. money-market mutual funds	615		—		—		615		422		—		—		422
Non-U.S. money-market mutual funds	7		—		—		7		7		—		—		7
Total	$	97,739	$	1,374	$	567	$	98,546	$	99,159	$	1,162	$	1,147	$	99,174
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	5,119	$	—	$	237	$	4,882	$	5,041	$	—	$	448	$	4,593
Mortgage-backed securities	74		5		—		79		91		6		—		97
Asset-backed securities:
Student loans⁽¹⁾	1,900		6		1		1,905		1,627		—		10		1,617
Credit cards	897		3		—		900		762		1		—		763
Other	692		3		1		694		782		1		2		781
Total asset-backed securities	3,489		12		2		3,499		3,171		2		12		3,161
Non-U.S. debt securities:
Mortgage-backed securities	4,274		200		21		4,453		4,211		150		48		4,313
Asset-backed securities	2,898		18		—		2,916		2,202		19		—		2,221
Government securities	2		—		—		2		2		—		—		2
Other	245		—		1		244		192		—		—		192
Total non-U.S. debt securities	7,419		218		22		7,615		6,607		169		48		6,728
State and political subdivisions	15		—		—		15		24		1		—		25
Collateralized mortgage obligations	2,641		151		18		2,774		2,806		176		26		2,956
Total	$	18,757	$	386	$	279	$	18,864	$	17,740	$	354	$	534	$	17,560

⁽¹⁾Substantially composed of securities guaranteed by the federal government with respect to at least 97% of defaulted principal and

accrued interest on the underlying loans.

Schedule of Gross Pre-tax Unrealized Losses on Investment Securities

The following tables present the aggregate fair values of investment securities that have been in a continuous unrealized loss position for less than 12 months, and those that have been in a continuous unrealized loss position for 12 months or longer, as of the dates indicated:



	Less than 12 months				12 months or longer				Total
June 30, 2014	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(In millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	—	$	127	$	1	$	127	$	1
Mortgage-backed securities	2,484		11		7,865		152		10,349		163
Asset-backed securities:
Student loans	440		4		6,901		154		7,341		158
Credit cards	1,268		2		1,664		32		2,932		34
Sub-prime	—		—		1,046		74		1,046		74
Other	1,533		7		360		7		1,893		14
Total asset-backed securities	3,241		13		9,971		267		13,212		280
Non-U.S. debt securities:
Mortgage-backed securities	580		1		215		2		795		3
Asset-backed securities	501		1		—		—		501		1
Other	1,992		3		295		5		2,287		8
Total non-U.S. debt securities	3,073		5		510		7		3,583		12
State and political subdivisions	308		3		2,263		69		2,571		72
Collateralized mortgage obligations	309		2		863		28		1,172		30
Other U.S. debt securities	—		—		405		9		405		9
Total	$	9,415	$	34	$	22,004	$	533	$	31,419	$	567
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	—	$	4,765	$	237	$	4,765	$	237
Asset-backed securities:
Student loans	—		—		160		1		160		1
Other	83		1		—		—		83		1
Total asset-backed securities	83		1		160		1		243		2
Non-U.S. mortgage-backed securities
Mortgage-backed securities	460		1		732		20		1,192		21
Other	54		1		—		—		54		1
Total non-U.S. debt securities	514		2		732		20		1,246		22
Collateralized mortgage obligations	343		5		631		13		974		18
Total	$	940	$	8	$	6,288	$	271	$	7,228	$	279



	Less than 12 months				12 months or longer				Total
December 31, 2013	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(In millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasury and federal agencies:
Direct obligations	$	182	$	1	$	113	$	1	$	295	$	2
Mortgage-backed securities	10,562		316		2,389		76		12,951		392
Asset-backed securities:
Student loans	1,930		16		7,252		252		9,182		268
Credit cards	3,714		30		161		11		3,875		41
Sub-prime	—		—		1,150		91		1,150		91
Other	1,896		12		439		11		2,335		23
Total asset-backed securities	7,540		58		9,002		365		16,542		423
Non-U.S. debt securities:
Mortgage-backed securities	868		2		258		7		1,126		9
Asset-backed securities	551		1		16		1		567		2
Other	1,655		9		150		2		1,805		11
Total non-U.S. debt securities	3,074		12		424		10		3,498		22
State and political subdivisions	3,242		113		1,268		85		4,510		198
Collateralized mortgage obligations	1,581		55		510		21		2,091		76
Other U.S. debt securities	1,039		25		58		9		1,097		34
Total	$	27,220	$	580	$	13,764	$	567	$	40,984	$	1,147
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	4,571	$	448	$	—	$	—	$	4,571	$	448
Asset-backed securities:
Student Loans	1,352		10		—		—		1,352		10
Other	297		1		29		1		326		2
Total asset-backed securities	1,649		11		29		1		1,678		12
Non-U.S. mortgage-backed securities	834		3		878		45		1,712		48
Collateralized mortgage obligations	759		18		161		8		920		26
Total	$	7,813	$	480	$	1,068	$	54	$	8,881	$	534

Investments Classified by Contractual Maturity Date

The following table presents contractual maturities of debt investment securities as of June 30, 2014:



(In millions)	Under 1 Year		1 to 5 Years		6 to 10 Years		Over 10 Years
Available for sale:
U.S. Treasury and federal agencies:
Direct obligations	$	2	$	783	$	2,079	$	571
Mortgage-backed securities	197		2,295		5,141		14,506
Asset-backed securities:
Student loans	378		6,718		4,219		2,647
Credit cards	1,650		3,261		1,655		—
Sub-prime	7		19		1		1,074
Other	506		1,224		1,187		1,718
Total asset-backed securities	2,541		11,222		7,062		5,439
Non-U.S. debt securities:
Mortgage-backed securities	2,055		5,053		403		3,924
Asset-backed securities	333		3,176		564		127
Government securities	2,233		1,590		—		—
Other	2,038		2,655		1,064		—
Total non-U.S. debt securities	6,659		12,474		2,031		4,051
State and political subdivisions	670		3,032		4,321		2,594
Collateralized mortgage obligations	397		1,403		1,113		2,461
Other U.S. debt securities	637		3,485		685		35
Total	$	11,103	$	34,694	$	22,432	$	29,657
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	—	$	5,000	$	119
Mortgage-backed securities	—		18		13		43
Asset-backed securities
Student loans	9		182		385		1,324
Credit cards	—		335		562		—
Other	24		441		222		5
Total asset-backed securities	33		958		1,169		1,329
Non-U.S. debt securities:
Mortgage-backed securities	87		1,320		181		2,686
Asset-backed securities	7		2,513		378		—
Government securities	2		—		—		—
Other	165		80		—		—
Total non-U.S. debt securities	261		3,913		559		2,686
State and political subdivisions	12		3		—		—
Collateralized mortgage obligations	487		697		510		947
Total	$	793	$	5,589	$	7,251	$	5,124

Gains and Losses Related to Investment Securities

The following tables present gross realized gains and gross realized losses from sales of available-for-sale securities and the components of net impairment losses, included in net gains and losses related to investment securities, for the periods indicated:



	Three Months Ended June 30,
(In millions)	2014			2013
Gross realized gains from sales of available-for-sale securities	$	1		$	30
Gross realized losses from sales of available-for-sale securities	(1		)	(30		)
Net impairment losses:
Gross losses from other-than-temporary impairment	—			(6		)
Losses reclassified (from) to other comprehensive income	(2		)	(1		)
Net impairment losses⁽¹⁾	(2		)	(7		)
Gains related to investment securities, net	$	(2	)	$	(7	)
⁽¹⁾ Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
Impairment associated with expected credit losses	$	(1	)	$	—
Impairment associated with management's intent to sell impaired securities prior to recovery in value	—			(6		)
Impairment associated with adverse changes in timing of expected future cash flows	(1		)	(1		)
Net impairment losses	$	(2	)	$	(7	)



	Six Months Ended June 30,
(In millions)	2014			2013
Gross realized gains from sales of available-for-sale securities	$	16		$	87
Gross realized losses from sales of available-for-sale securities	(1		)	(82		)
Net impairment losses:
Gross losses from other-than-temporary impairment	(1		)	(6		)
Losses reclassified (from) to other comprehensive income	(10		)	(4		)
Net impairment losses⁽¹⁾	(11		)	(10		)
Gains related to investment securities, net	$	4		$	(5	)
⁽¹⁾ Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
Impairment associated with expected credit losses	$	(10	)	$	—
Impairment associated with management's intent to sell impaired securities prior to recovery in value	—			(6		)
Impairment associated with adverse changes in timing of expected future cash flows	(1		)	(4		)
Net impairment losses	$	(11	)	$	(10	)

Schedule of Credit-Related Loss Activity Recognized in Earnings

The following table presents activity with respect to net impairment losses for the periods indicated:



	Six Months Ended June 30,
(In millions)	2014			2013
Beginning balance	$	122		$	124
Plus losses for which other-than-temporary impairment was not previously recognized	—			6
Plus losses for which other-than-temporary impairment was previously recognized	11			4
Less previously recognized losses related to securities sold or matured	(2		)	(9		)
Less losses related to securities intended or required to be sold	(6		)	—
Ending balance	$	125		$	125

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of the realized and unrealized gains and losses reported in the statement of income which have resulted from the sale and holding of marketable securities, respectively, as well as the sale or disposal of cost method investments. Such amounts would include realized gains and losses on the sale or disposal of trading, available-for-sale, and held-to-maturity securities, unrealized gains and losses on trading securities, unrealized gains and losses on available-for-sale and held-to-maturity securities transferred to the trading securities category, realized gains and losses on the sale or disposal of cost method investments, and losses recognized for other than temporary impairments (OTTI) of such investments.

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- Definition

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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