Investment Securities (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016								December 31, 2015
	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	$	5,283	$	20	$	1	$	5,302	$	5,717	$	6	$	5	$	5,718
Mortgage-backed securities	17,796		224		25		17,995		18,168		131		134		18,165
Asset-backed securities:
Student loans⁽¹⁾	7,451		19		163		7,307		7,358		16		198		7,176
Credit cards	1,388		12		25		1,375		1,378		—		37		1,341
Sub-prime	376		2		24		354		448		2		31		419
Other⁽²⁾	1,257		16		—		1,273		1,724		43		3		1,764
Total asset-backed securities	10,472		49		212		10,309		10,908		61		269		10,700
Non-U.S. debt securities:
Mortgage-backed securities	7,122		48		9		7,161		7,010		72		11		7,071
Asset-backed securities	2,528		4		3		2,529		3,272		2		7		3,267
Government securities	5,967		17		—		5,984		4,348		7		—		4,355
Other⁽³⁾	5,876		44		1		5,919		4,817		29		12		4,834
Total non-U.S. debt securities	21,493		113		13		21,593		19,447		110		30		19,527
State and political subdivisions	10,274		505		23		10,756		9,402		371		27		9,746
Collateralized mortgage obligations	2,752		62		8		2,806		2,993		16		22		2,987
Other U.S. debt securities	2,306		39		7		2,338		2,611		31		18		2,624
U.S. equity securities	39		4		2		41		33		9		3		39
Non-U.S. equity securities	3		—		—		3		3		—		—		3
U.S. money-market mutual funds	361		—		—		361		542		—		—		542
Non-U.S. money-market mutual funds	16		—		—		16		19		—		—		19
Total	$	70,795	$	1,016	$	291	$	71,520	$	69,843	$	735	$	508	$	70,070
Held-to-maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	17,553	$	333	$	1	$	17,885	$	20,878	$	2	$	217	$	20,663
Mortgage-backed securities	4,280		20		3		4,297		610		2		8		604
Asset-backed securities:
Student loans⁽¹⁾	1,440		—		40		1,400		1,592		—		47		1,545
Credit cards	897		3		—		900		897		—		1		896
Other	76		—		—		76		366		2		1		367
Total asset-backed securities	2,413		3		40		2,376		2,855		2		49		2,808
Non-U.S. debt securities:
Mortgage-backed securities	1,581		84		17		1,648		2,202		109		26		2,285
Asset-backed securities	697		—		1		696		1,415		4		3		1,416
Government securities	288		3		—		291		239		—		1		238
Other	119		2		—		121		65		—		—		65
Total non-U.S. debt securities	2,685		89		18		2,756		3,921		113		30		4,004
State and political subdivisions	—		—		—		—		1		—		—		1
Collateralized mortgage obligations	1,437		42		13		1,466		1,687		60		29		1,718
Total	$	28,368	$	487	$	75	$	28,780	$	29,952	$	179	$	333	$	29,798

⁽¹⁾ Primarily composed of securities guaranteed by the federal government with respect to at least 97% of defaulted principal and accrued interest on the underlying loans.

⁽²⁾As of September 30, 2016 and December 31, 2015, the fair value of other ABS was primarily composed of $1.27 billion and $1.76 billion, respectively, of collateralized loan obligations.

⁽³⁾As of September 30, 2016 and December 31, 2015, the fair value of other non-U.S. debt securities was primarily composed of $3.98 billion and $3.18 billion, respectively, of covered bonds and $981 million and $613 million, as of September 30, 2016 and December 31, 2015, respectively, of corporate bonds.

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, 2016	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(In millions)
Available-for-sale:
U.S. Treasury and federal agencies:
Direct obligations	$	35	$	—	$	177	$	1	$	212	$	1
Mortgage-backed securities	3,116		12		858		13		3,974		25
Asset-backed securities:
Student loans	520		3		4,990		160		5,510		163
Credit cards	—		—		505		25		505		25
Sub-prime	3		—		330		24		333		24
Other	150		—		150		—		300		—
Total asset-backed securities	673		3		5,975		209		6,648		212
Non-U.S. debt securities:
Mortgage-backed securities	368		1		1,137		8		1,505		9
Asset-backed securities	333		1		463		2		796		3
Government securities	2,044		—		—		—		2,044		—
Other	569		1		363		—		932		1
Total non-U.S. debt securities	3,314		3		1,963		10		5,277		13
State and political subdivisions	714		9		508		14		1,222		23
Collateralized mortgage obligations	397		3		219		5		616		8
Other U.S. debt securities	133		—		157		7		290		7
U.S. equity securities	—		—		5		2		5		2
Non-U.S. equity securities	—		—		1		—		1		—
Total	$	8,382	$	30	$	9,863	$	261	$	18,245	$	291
Held-to-maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	—	$	90	$	1	$	90	$	1
Mortgage-backed securities	936		3		—		—		936		3
Asset-backed securities:
Student loans	452		12		922		28		1,374		40
Other	—		—		15		—		15		—
Total asset-backed securities	452		12		937		28		1,389		40
Non-U.S. mortgage-backed securities:
Mortgage-backed securities	104		3		406		14		510		17
Asset-backed securities	8		—		271		1		279		1
Government securities	174		—		—		—		174		—
Total non-U.S. debt securities	286		3		677		15		963		18
Collateralized mortgage obligations	521		4		196		9		717		13
Total	$	2,195	$	22	$	1,900	$	53	$	4,095	$	75



	Less than 12 months				12 months or longer				Total
December 31, 2015	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(In millions)
Available-for-sale:
U.S. Treasury and federal agencies:
Direct obligations	$	3,123	$	4	$	121	$	1	$	3,244	$	5
Mortgage-backed securities	5,729		48		3,166		86		8,895		134
Asset-backed securities:
Student loans	2,841		54		3,217		144		6,058		198
Credit cards	838		7		490		30		1,328		37
Sub-prime	7		—		387		31		394		31
Other	720		3		43		—		763		3
Total asset-backed securities	4,406		64		4,137		205		8,543		269
Non-U.S. debt securities:
Mortgage-backed securities	1,457		7		437		4		1,894		11
Asset-backed securities	2,190		7		22		—		2,212		7
Government securities	1,691		—		—		—		1,691		—
Other	1,548		5		527		7		2,075		12
Total non-U.S. debt securities	6,886		19		986		11		7,872		30
State and political subdivisions	206		1		658		26		864		27
Collateralized mortgage obligations	1,511		14		217		8		1,728		22
Other U.S. debt securities	475		9		178		9		653		18
U.S. equity securities	—		—		5		3		5		3
Total	$	22,336	$	159	$	9,468	$	349	$	31,804	$	508
Held-to-maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	16,370	$	120	$	3,005	$	97	$	19,375	$	217
Mortgage-backed securities	560		8		—		—		560		8
Asset-backed securities:
Student loans	896		25		615		22		1,511		47
Credit cards	636		1		—		—		636		1
Other	102		—		31		1		133		1
Total asset-backed securities	1,634		26		646		23		2,280		49
Non-U.S. debt securities:
Mortgage-backed securities	338		2		524		24		862		26
Asset-backed securities	1,015		3		69		—		1,084		3
Government securities	128		1		—		—		128		1
Other	—		—		43		—		43		—
Total non-U.S. debt securities	1,481		6		636		24		2,117		30
Collateralized mortgage obligations	634		9		537		20		1,171		29
Total	$	20,679	$	169	$	4,824	$	164	$	25,503	$	333

Investments Classified by Contractual Maturity Date

The following table presents contractual maturities of debt investment securities by carrying amount as of September 30, 2016. The maturities of certain asset-backed securities, mortgage-backed securities, and collateralized mortgage obligations are based on expected principal payments. Actual maturities may differ from these expected maturities since certain borrowers have the right to prepay obligations with or without prepayment penalties.



September 30, 2016	Under 1 Year		1 to 5 Years		6 to 10 Years		Over 10 Years		Total
(In millions)	Under 1 Year		1 to 5 Years		6 to 10 Years		Over 10 Years		Total
Available-for-sale:
U.S. Treasury and federal agencies:
Direct obligations	$	3,504	$	1,250	$	146	$	402	$	5,302
Mortgage-backed securities	61		1,940		4,343		11,651		17,995
Asset-backed securities:
Student loans	894		3,376		1,132		1,905		7,307
Credit cards	4		1,068		303		—		1,375
Sub-prime	3		2		2		347		354
Other	3		84		1,036		150		1,273
Total asset-backed securities	904		4,530		2,473		2,402		10,309
Non-U.S. debt securities:
Mortgage-backed securities	1,239		3,734		850		1,338		7,161
Asset-backed securities	80		2,214		229		6		2,529
Government securities	4,453		1,319		212		—		5,984
Other	1,818		3,710		391		—		5,919
Total non-U.S. debt securities	7,590		10,977		1,682		1,344		21,593
State and political subdivisions	460		2,387		5,730		2,179		10,756
Collateralized mortgage obligations	16		55		842		1,893		2,806
Other U.S. debt securities	601		1,074		616		47		2,338
Total	$	13,136	$	22,213	$	15,832	$	19,918	$	71,099
Held-to-maturity:
U.S. Treasury and federal agencies:
Direct obligations	$	—	$	14,732	$	2,745	$	76	$	17,553
Mortgage-backed securities	1		8		167		4,104		4,280
Asset-backed securities:
Student loans	89		175		230		946		1,440
Credit cards	98		799		—		—		897
Other	13		26		34		3		76
Total asset-backed securities	200		1,000		264		949		2,413
Non-U.S. debt securities:
Mortgage-backed securities	368		387		74		752		1,581
Asset-backed securities	145		546		6		—		697
Government securities	175		113		—		—		288
Other	74		45		—		—		119
Total non-U.S. debt securities	762		1,091		80		752		2,685
Collateralized mortgage obligations	103		25		299		1,010		1,437
Total	$	1,066	$	16,856	$	3,555	$	6,891	$	28,368

Schedule of Credit-Related Loss Activity Recognized in Earnings

The following table presents a roll-forward with respect to net impairment losses that have been recognized in income for the periods indicated.



	Nine Months Ended September 30,
(In millions)	2016			2015
Balance, beginning of period	$	92		$	115
Additions:
Losses for which OTTI was previously recognized	2			1
Deductions:
Previously recognized losses related to securities sold or matured	(26		)	(22		)
Balance, end of period	$	68		$	94

- 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.

+ References + Details