American Express 2015 Annual Report Download - page 131

CARD MEMBER LOANS EVALUATED INDIVIDUALLY AND COLLECTIVELY FOR IMPAIRMENT
The following table presents Card Member loans evaluated individually and collectively for impairment, and
related reserves, as of December 31:
(Millions) 2015 2014 2013
Card Member loans evaluated individually for impairment (a) ...................... $ 279 $ 286 $ 356
Related reserves (a) ......................................................... $53$67$78
Card Member loans evaluated collectively for impairment (b) ...................... $58,294 $70,099 $66,882
Related reserves (b) ......................................................... $ 975 $ 1,134 $ 1,183
(a) Represents loans modified as a TDR and related reserves.
(b) Represents current loans and loans less than 90 days past due, loans over 90 days past due and accruing interest, and non-accrual loans. The
reserves include the quantitative results of analytical models that are specific to individual pools of loans, and reserves for internal and external
qualitative risk factors that apply to loans that are collectively evaluated for impairment.
NOTE 5
INVESTMENT SECURITIES
Investment securities principally include debt securities that the Company classifies as available-for-sale and
carries at fair value on the Consolidated Balance Sheets, with unrealized gains (losses) recorded in Accumulated Other
Comprehensive Loss, net of income taxes. Realized gains and losses are recognized on a trade-date basis in results of
operations upon disposition of the securities using the specific identification method. Refer to Note 15 and Note 19 for
a description of the Company’s methodology for determining the fair value of investment securities and gross realized
gains on the sale of investment securities, respectively.
The following is a summary of investment securities as of December 31:
2015 2014
Description of Securities (Millions) Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Estimated Fair Value Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Estimated Fair Value
State and municipal obligations ................... $ 2,813 $ 85 $(5) $2,893 $3,366 $129 $(2) $3,493
U.S. Government agency obligations ............... 2——23——3
U.S. Government treasury obligations . . ............ 406 4 (1) 409 346 4 — 350
Corporate debt securities . . . . . . . . ................ 29 1 — 30 37 3 — 40
Mortgage-backed securities (a) .................... 117 4 — 121 128 8 — 136
Equity securities (b) .............................. 1—— 1—1—1
Foreign government bonds and obligations . ........ 250 6 (1) 255 350 9 — 359
Other (c) ........................................ 50 — (2) 48 50 — (1) 49
Total . . . . . . . . . . . . . . . . . . . . . . . . . . ................ $3,668 $100 $(9) $3,759 $4,280 $154 $(3) $ 4,431
(a) Represents mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
(b) 2013 amount primarily represents the Company’s investment in the Industrial and Commercial Bank of China (ICBC), the remaining amount of
which was sold in the third quarter of 2014.
(c) Other comprises investments in various mutual funds.
The following table provides information about the Company’s investment securities with gross unrealized losses
and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31:
2015 2014
Less than 12 months 12 months or more Less than 12 months 12 months or more
Description of Securities (Millions) Estimated Fair Value
Gross
Unrealized
Losses Estimated Fair Value
Gross
Unrealized
Losses Estimated Fair Value
Gross
Unrealized
Losses Estimated Fair Value
Gross
Unrealized
Losses
State and municipal obligations ........ $100 $(3) $ 13 $(2) $— $— $ 72 $(2)
U.S.Governmenttreasuryobligations..... 253 (1) — — ————
Foreign government bonds and obligations . . 99 (1) — — ————
Other ............................... — — 33 (2) — — 33 (1)
Total ............................... $452 $(5) $46 $(4) $— $— $105 $(3)
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