Investment Securities (Tables)

9 Months Ended

Sep. 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:



	September 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	$	10,751	$	17	$	4	$	10,764	$	702	$	9	$	2	$	709
Mortgage-backed securities	21,203		196		198		21,201		23,744		211		392		23,563
Asset-backed securities:
Student loans⁽¹⁾	12,806		122		122		12,806		14,718		92		268		14,542
Credit cards	3,128		13		30		3,111		8,230		21		41		8,210
Sub-prime	1,054		2		59		997		1,291		3		91		1,203
Other	4,239		114		10		4,343		4,949		138		23		5,064
Total asset-backed securities	21,227		251		221		21,257		29,188		254		423		29,019
Non-U.S. debt securities:
Mortgage-backed securities	10,056		185		2		10,239		10,808		230		9		11,029
Asset-backed securities	3,433		15		1		3,447		5,369		23		2		5,390
Government securities	3,605		8		—		3,613		3,759		2		—		3,761
Other	5,802		55		8		5,849		4,679		59		11		4,727
Total non-U.S. debt securities	22,896		263		11		23,148		24,615		314		22		24,907
State and political subdivisions	10,366		323		44		10,645		10,301		160		198		10,263
Collateralized mortgage obligations	4,629		57		15		4,671		5,275		70		76		5,269
Other U.S. debt securities	4,189		106		11		4,284		4,876		138		34		4,980
U.S. equity securities	29		9		—		38		28		6		—		34
Non-U.S. equity securities	2		—		—		2		1		—		—		1
U.S. money-market mutual funds	532		—		—		532		422		—		—		422
Non-U.S. money-market mutual funds	10		—		—		10		7		—		—		7
Total	$	95,834	$	1,222	$	504	$	96,552	$	99,159	$	1,162	$	1,147	$	99,174
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	5,117	$	—	$	222	$	4,895	$	5,041	$	—	$	448	$	4,593
Mortgage-backed securities	68		4		—		72		91		6		—		97
Asset-backed securities:
Student loans⁽¹⁾	1,873		5		1		1,877		1,627		—		10		1,617
Credit cards	897		2		—		899		762		1		—		763
Other	633		3		1		635		782		1		2		781
Total asset-backed securities	3,403		10		2		3,411		3,171		2		12		3,161
Non-U.S. debt securities:
Mortgage-backed securities	4,153		192		16		4,329		4,211		150		48		4,313
Asset-backed securities	3,293		18		—		3,311		2,202		19		—		2,221
Government securities	110		—		—		110		2		—		—		2
Other	75		—		—		75		192		—		—		192
Total non-U.S. debt securities	7,631		210		16		7,825		6,607		169		48		6,728
State and political subdivisions	12		—		—		12		24		1		—		25
Collateralized mortgage obligations	2,536		129		15		2,650		2,806		176		26		2,956
Total	$	18,767	$	353	$	255	$	18,865	$	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
September 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	$	4,374	$	3	$	158	$	1	$	4,532	$	4
Mortgage-backed securities	3,391		23		7,026		175		10,417		198
Asset-backed securities:
Student loans	291		2		6,158		120		6,449		122
Credit cards	—		—		1,258		30		1,258		30
Sub-prime	—		—		936		59		936		59
Other	606		2		506		8		1,112		10
Total asset-backed securities	897		4		8,858		217		9,755		221
Non-U.S. debt securities:
Mortgage-backed securities	443		1		176		1		619		2
Asset-backed securities	—		—		84		1		84		1
Other	2,148		2		283		6		2,431		8
Total non-U.S. debt securities	2,591		3		543		8		3,134		11
State and political subdivisions	439		2		1,786		42		2,225		44
Collateralized mortgage obligations	886		5		314		10		1,200		15
Other U.S. debt securities	336		2		294		9		630		11
Total	$	12,914	$	42	$	18,979	$	462	$	31,893	$	504
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	114	$	1	$	4,781	$	221	$	4,895	$	222
Asset-backed securities:
Student loans	364		1		—		—		364		1
Other	79		1		—		—		79		1
Total asset-backed securities	443		2		—		—		443		2
Non-U.S. mortgage-backed securities
Mortgage-backed securities	255		1		658		15		913		16
Total non-U.S. debt securities	255		1		658		15		913		16
Collateralized mortgage obligations	467		3		552		12		1,019		15
Total	$	1,279	$	7	$	5,991	$	248	$	7,270	$	255



	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 September 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	$	151	$	6,766	$	3,300	$	547
Mortgage-backed securities	183		2,441		4,753		13,824
Asset-backed securities:
Student loans	342		6,572		3,750		2,142
Credit cards	307		1,513		1,291		—
Sub-prime	9		14		—		974
Other	255		1,069		1,149		1,870
Total asset-backed securities	913		9,168		6,190		4,986
Non-U.S. debt securities:
Mortgage-backed securities	2,190		4,344		384		3,321
Asset-backed securities	359		2,691		290		107
Government securities	1,978		1,635		—		—
Other	1,969		2,942		938		—
Total non-U.S. debt securities	6,496		11,612		1,612		3,428
State and political subdivisions	731		3,021		4,451		2,442
Collateralized mortgage obligations	286		1,165		1,072		2,148
Other U.S. debt securities	700		3,221		328		35
Total	$	9,460	$	37,394	$	21,706	$	27,410
Held to maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	—	$	5,000	$	117
Mortgage-backed securities	—		15		13		40
Asset-backed securities
Student loans	7		182		393		1,291
Credit cards	—		375		522		—
Other	19		401		208		5
Total asset-backed securities	26		958		1,123		1,296
Non-U.S. debt securities:
Mortgage-backed securities	323		1,208		274		2,348
Asset-backed securities	5		3,051		237		—
Government securities	110		—		—		—
Other	—		75		—		—
Total non-U.S. debt securities	438		4,334		511		2,348
State and political subdivisions	9		3		—		—
Collateralized mortgage obligations	577		550		503		906
Total	$	1,050	$	5,860	$	7,150	$	4,707

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 September 30,
(In millions)	2014			2013
Gross realized gains from sales of available-for-sale securities	$	48		$	11
Gross realized losses from sales of available-for-sale securities	(48		)	(5		)
Net impairment losses:
Gross losses from other-than-temporary impairment	—			(13		)
Losses reclassified (from) to other comprehensive income	—			3
Net impairment losses⁽¹⁾	—			(10		)
Gains related to investment securities, net	$	—		$	(4	)
⁽¹⁾ Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
Impairment associated with expected credit losses	$	—		$	(8	)
Impairment associated with management's intent to sell impaired securities prior to recovery in value	—			—
Impairment associated with adverse changes in timing of expected future cash flows	—			(2		)
Net impairment losses	$	—		$	(10	)



	Nine Months Ended September 30,
(In millions)	2014			2013
Gross realized gains from sales of available-for-sale securities	$	64		$	98
Gross realized losses from sales of available-for-sale securities	(49		)	(87		)
Net impairment losses:
Gross losses from other-than-temporary impairment	(1		)	(19		)
Losses reclassified (from) to other comprehensive income	(10		)	(1		)
Net impairment losses⁽¹⁾	(11		)	(20		)
Gains related to investment securities, net	$	4		$	(9	)
⁽¹⁾ Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
Impairment associated with expected credit losses	$	(10	)	$	(8	)
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		)	(6		)
Net impairment losses	$	(11	)	$	(20	)

Schedule of Credit-Related Loss Activity Recognized in Earnings

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



	Nine Months Ended September 30,
(In millions)	2014			2013
Beginning balance	$	122		$	124
Plus losses for which other-than-temporary impairment was not previously recognized	—			14
Plus losses for which other-than-temporary impairment was previously recognized	11			6
Less previously recognized losses related to securities sold or matured	(11		)	(10		)
Less losses related to securities intended or required to be sold	(6		)	—
Ending balance	$	116		$	134

- 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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