Discover 2015 Annual Report Download - page 116

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-100-
4. Investments
The Company’s investment securities consist of the following (dollars in millions):
December 31,
2015 2014 2013
U.S. Treasury securities(1) ...................................................................................................... $ 1,273 $ 1,330 $2,058
U.S. government agency securities ......................................................................................... 494 1,033 1,561
States and political subdivisions of states ................................................................................ 7 10 15
Other securities
Credit card asset-backed securities of other issuers .............................................................. — — 6
Residential mortgage-backed securities - Agency(2) .............................................................. 1,310 1,576 1,351
Total other securities ..................................................................................................... 1,310 1,576 1,357
Total investment securities .......................................................................................... $ 3,084 $ 3,949 $4,991
(1) Includes $7 million, $16 million and $9 million of U.S. Treasury securities pledged as swap collateral as of December 31, 2015, 2014 and 2013, respectively.
(2) Consists of residential mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae.
The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale and held-to-maturity
investment securities are as follows (dollars in millions):
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
At December 31, 2015
Available-for-Sale Investment Securities(1)
U.S. Treasury securities ............................................................................ $ 1,277 $ 1 $ (6) $ 1,272
U.S. government agency securities ............................................................ 492 2 — 494
Residential mortgage-backed securities - Agency ....................................... 1,195 6 (4) 1,197
Total available-for-sale investment securities .......................................... $ 2,964 $ 9 $ (10) $ 2,963
Held-to-Maturity Investment Securities(2)
U.S. Treasury securities(3) ......................................................................... $ 1 $ — $ — $ 1
States and political subdivisions of states ................................................... 7 — — 7
Residential mortgage-backed securities - Agency(4) ..................................... 113 1 — 114
Total held-to-maturity investment securities ............................................. $ 121 $ 1 $ — $ 122
At December 31, 2014
Available-for-Sale Investment Securities(1)
U.S. Treasury securities ............................................................................ $ 1,317 $ 12 $ — $ 1,329
U.S. government agency securities ............................................................ 1,021 12 — 1,033
Residential mortgage-backed securities - Agency ....................................... 1,473 13 (1) 1,485
Total available-for-sale investment securities .......................................... $ 3,811 $ 37 $ (1) $ 3,847
Held-to-Maturity Investment Securities(2)
U.S. Treasury securities(3) ......................................................................... $ 1 $ — $ — $ 1
States and political subdivisions of states ................................................... 10 — — 10
Residential mortgage-backed securities - Agency(4)
..................................... 91 2 — 93
Total held-to-maturity investment securities ............................................. $ 102 $ 2 $ — $ 104
(1) Available-for-sale investment securities are reported at fair value.
(2) Held-to-maturity investment securities are reported at amortized cost.
(3) Amount represents securities pledged as collateral to a government-related merchant for which transaction settlement occurs beyond the normal 24-hour period.
(4) Amounts represent residential mortgage-backed securities that were classified as held-to-maturity as they were entered into as a part of the Company's community
reinvestment initiatives.