STI 2018 Annual Report

49 The investment securities portfolio is managed as part of our overall liquidity management and ALM process to optimize income and portfolio value over an entire interest rate cyclewhile mitigating the associated risks. Changes in the size and composition of the portfolio reflect our efforts to maintain a high quality, liquid portfolio, while managing our interest rate risk profile. The amortized cost of the portfolio increased $997 million during the year ended December 31, 2018, due primarily to increased holdings of agency commercial and residentialMBS as well as non-agency commercial MBS, offset partially by decreased holdings of U.S. Treasury securities, non-agency residential MBS, and federal agency securities. The fair value of the securities AFS portfolio increased $495 million compared to December 31, 2017, due primarily to the aforementioned increases in securities holdings, offset largely by a $502 million increase in net unrealized losses associated with increased market interest rates. At December 31, 2018, the overall securities AFS portfolio was in a $468 million net unrealized loss position, compared to a net unrealized gain position of $34 million at December 31, 2017. The securities AFS portfolio had an effective duration of 4.6 years at December 31, 2018 compared to 4.5 years at December 31, 2017. Net realized gains on the sale of securities AFS were immaterial for the year ended December 31, 2018 and the year ended December 31, 2016, while net realized losses on the sale of securities AFS for the year ended December 31, 2017 totaled $108 million due to the fourth quarter of 2017 portfolio restructuring. There were no OTTI credit losses recognized in earnings for the year ended December 31, 2018 or the year ended December 31, 2016, and OTTI credit losses for the year ended December 31, 2017 were immaterial. For additional information on our accounting policies, composition, and valuation assumptions related to the securities AFS portfolio, see Note 1, "Significant Accounting Policies," Note 6, "Investment Securities," and the “Trading Assets and Derivative Instruments and Investment Securities” section of Note 20, “Fair Value Election and Measurement,” to the Consolidated Financial Statements in this Form 10-K. For the year ended December 31, 2018, the average yield on the securities AFS portfolio was 2.69%, compared to 2.47% for the year ended December 31, 2017. The increase in average yield was due primarily to higher benchmark interest rates and lower premium amortization. See additional discussion related to average yields on securities AFS in the "Net Interest Income/ Margin" section of this MD&A. The credit quality and liquidity profile of our investment securities portfolio remained strong at December 31, 2018. Over the longer term, the size and composition of the investment securities portfolio will reflect balance sheet trends and our overall liquidity objectives. Accordingly, the size and composition of the investment securities portfolio could change over time. DEPOSITS Composition of Average Deposits Table 14 Year Ended December 31 % of Total Deposits (Dollars in millions) 2018 2017 2016 2018 2017 2016 Noninterest-bearing deposits $42,591 $43,655 $43,400 26% 27% 28% Interest-bearing deposits: NOW accounts 46,170 45,009 40,949 29 28 26 Money market accounts 50,042 53,592 53,795 31 33 35 Savings 6,647 6,519 6,285 4 4 4 Consumer time 6,332 5,626 5,852 4 4 4 Other time 7,986 5,148 3,908 5 3 2 Total consumer and commercial deposits 159,768 159,549 154,189 99 99 99 Brokered time deposits 1,031 941 926 1 1 1 Foreign deposits 94 421 123 — — — Total deposits $160,893 $160,911 $155,238 100% 100% 100% During 2018, we experienced continued deposit growth across most of our product categories as well as a migration from lower- cost deposits to CDs, due largely to higher interest rates. See Table 1, Table 2, and the “Net Interest Income/Margin” section in this MD&A for additional information regarding average deposit balances, rates paid, and associated impacts on net interest income. See Note 6, “Investment Securities,” to the Consolidated Financial Statements in this Form 10-K for information regarding collateral pledged to secure public deposits. Average consumer and commercial deposits increased $219 million in 2018, relatively stable compared to 2017 as growth in time deposits and NOWaccounts were offset largely by declines in money market accounts and noninterest-bearing deposits. Average deposits grew in the Consumer business segment, driven by targeted client outreach, improved execution across our branch network, leveraging new pricing capabilities, and a focus on meeting our clients’ deposit needs across all channels. The Wholesale business segment experienced a decline in average deposits driven by outflows into alternative investments, corporate funding, and acquisitions.