STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 142 permitted to close out transactions with the Bank on a net basis, at amounts that would approximate the fair values of the derivatives, resulting in a single sum due by one party to the other. The counterparties would have the right to apply any collateral posted by the Bank against any net amount owed by the Bank. Additionally, certain of the Company’s derivative liability positions, totaling $589 million and $1.1 billion in fair value at December 31, 2018 and 2017, respectively, contain provisions conditioned on downgrades of the Bank’s credit rating. These provisions, if triggered, would either give rise to anATE that permits the counterparties to close-out net and apply collateral or, where a CSA is present, require the Bank to post additional collateral. At December 31, 2018, the Bank held senior long-term debt credit ratings of Baal/A-/A- from Moody’s, S&P, and Fitch, respectively. At December 31, 2018, ATEs have been triggered for less than $1 million in fair value liabilities. The maximum additional liability that could be triggered from ATEs was approximately $10 million at December 31, 2018. At December 31, 2018, $580 million in fair value of derivative liabilities were subject to CSAs, against which the Bank has posted $536 million in collateral, primarily in the form of cash. Pursuant to the terms of the CSA, the Bank would be required to post additional collateral of approximately $1 million against these contracts if the Bank were downgraded to Baa2/BBB+. Further downgrades to Baa3/BBB and Ba1/BBB- would require the Bank to post an additional $6 million and $10 million of collateral, respectively. Any downgrades belowBa2/BB+ do not contain predetermined collateral posting levels. Notional and Fair Value of Derivative Positions The following table presents the Company’s derivative positions at December 31, 2018 and 2017. The notional amounts in the table are presented on a gross basis at December 31, 2018 and 2017. Gross positive and gross negative fair value amounts associated with respective notional amounts are presented without consideration of any netting agreements, including collateral arrangements. Net fair value derivative amounts are adjusted on an aggregate basis, where applicable, to take into consideration the effects of legally enforceable master netting agreements, including any cash collateral received or paid, and are recognized in Trading assets and derivative instruments or Trading liabilities and derivative instruments on the Consolidated Balance Sheets.