Wells Fargo 2011 Annual Report Download - page 138

Note 5: Securities Available for Sale (continued)
by those rated investment grade and those rated less than
investment grade, according to their lowest credit rating by
Standard & Poor’s Rating Services (S&P) or Moody’s Investors
Service (Moody’s). Credit ratings express opinions about the
credit quality of a security. Securities rated investment grade,
that is those rated BBB- or higher by S&P or Baa3 or higher by
Moody’s, are generally considered by the rating agencies and
market participants to be low credit risk. Conversely, securities
rated below investment grade, labeled as “speculative grade” by
the rating agencies, are considered to be distinctively higher
credit risk than investment grade securities. We have also
included securities not rated by S&P or Moody’s in the table
below based on the internal credit grade of the securities (used
for credit risk management purposes) equivalent to the credit
rating assigned by major credit agencies. The unrealized losses
and fair value of unrated securities categorized as investment
grade based on internal credit grades were $207 million and
$6.2 billion, respectively, at December 31, 2011, and $83 million
and $1.3 billion, respectively, at December 31, 2010. If an
internal credit grade was not assigned, we categorized the
security as non-investment grade.
Investment grade
Non-investment grade
Gross
Gross
unrealized
Fair
unrealized
Fair
(in millions)
losses
value
losses
value
December 31, 2011
Securities of U.S. Treasury and federal agencies
$
(11)
5,473
-
-
Securities of U.S. states and political subdivisions
(781)
12,093
(102)
756
Mortgage-backed securities:
Federal agencies
(10)
3,019
-
-
Residential
(39)
2,503
(375)
4,717
Commercial
(429)
6,273
(499)
874
Total mortgage-backed securities
(478)
11,795
(874)
5,591
Corporate debt securities
(165)
7,156
(121)
1,118
Collateralized debt obligations
(185)
4,597
(164)
284
Other
(186)
3,458
(39)
385
Total debt securities
(1,806)
44,572
(1,300)
8,134
Perpetual preferred securities
(53)
833
(1)
13
Total
$
(1,859)
45,405
(1,301)
8,147
December 31, 2010
Securities of U.S. Treasury and federal agencies
$
(15)
544
-
-
Securities of U.S. states and political subdivisions
(722)
8,423
(115)
539
Mortgage-backed securities:
Federal agencies
(96)
8,163
-
-
Residential
(23)
888
(466)
4,575
Commercial
(299)
4,679
(336)
903
Total mortgage-backed securities
(418)
13,730
(802)
5,478
Corporate debt securities
(22)
330
(15)
304
Collateralized debt obligations
(42)
613
(187)
522
Other
(180)
2,510
(103)
232
Total debt securities
(1,399)
26,150
(1,222)
7,075
Perpetual preferred securities
(81)
1,327
(8)
102
Total
$
(1,480)
27,477
(1,230)
7,177
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