STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 102 NOTE 5 - TRADING ASSETS AND LIABILITIES AND DERIVATIVE INSTRUMENTS The fair values of the components of trading assets and liabilities and derivative instruments are presented in the following table: (Dollars in millions) December 31, 2018 December 31, 2017 Trading Assets and Derivative Instruments: U.S. Treasury securities $262 $157 Federal agency securities 188 395 U.S. states and political subdivisions 54 61 MBS - agency 860 700 Corporate and other debt securities 700 655 CP 190 118 Equity securities 73 56 Derivative instruments 1 639 802 Trading loans 2 2,540 2,149 Total trading assets and derivative instruments $5,506 $5,093 Trading Liabilities and Derivative Instruments: U.S. Treasury securities $801 $577 MBS - agency 3 — Corporate and other debt securities 385 289 Equity securities 5 9 Derivative instruments 1 410 408 Total trading liabilities and derivative instruments $1,604 $1,283 1 Amounts include the impact of offsetting cash collateral received from and paid to the same derivative counterparties, and the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement or similar agreement exists. 2 Includes loans related to TRS. Various trading and derivative instruments are used as part of the Company’s overall balance sheet management strategies and to support client requirements executed through the Bank and/ or STRH, a broker/dealer subsidiary of the Company. The Company manages the potential market volatility associated with trading instruments by using appropriate risk management strategies. The size, volume, and nature of the trading products and derivative instruments can vary based on economic conditions as well as client-specific and Company-specific asset or liability positions. Product offerings to clients include debt securities, loans traded in the secondary market, equity securities, derivative contracts, and other similar financial instruments. Other trading- related activities include acting as a market maker for certain debt and equity security transactions, derivative instrument transactions, and foreign exchange transactions. The Company also uses derivatives to manage its interest rate and market risk from non-trading activities. The Company has policies and procedures to manage market risk associated with client trading and non-trading activities, and assumes a limited degree of market risk by managing the size and nature of its exposure. For valuation assumptions and additional information related to the Company's trading products and derivative instruments, seeNote 19, “Derivative Financial Instruments,” and the “TradingAssets and Derivative Instruments and Investment Securities” section of Note 20, “Fair Value Election and Measurement.” Pledged trading assets are presented in the following table: (Dollars in millions) December 31, 2018 December 31, 2017 Pledged trading assets to secure repurchase agreements 1 $1,418 $1,016 Pledged trading assets to secure certain derivative agreements 22 72 Pledged trading assets to secure other arrangements 40 41 1 Repurchase agreements secured by collateral totaled $1.4 billion and $975 million at December 31, 2018 and 2017, respectively.