STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 144 Netting of Derivative Instruments The Company has various financial assets and financial liabilities that are subject to enforceable master netting agreements or similar agreements. The Company's securities borrowed or purchased under agreements to resell, and securities sold under agreements to repurchase, that are subject to enforceable master netting agreements or similar agreements, are discussed in Note 4, "Federal Funds Sold and Securities Financing Activities." The Company enters into ISDA or other legally enforceable industry standard master netting agreements with derivative counterparties. Under the terms of the master netting agreements, all transactions between the Company and the counterparty constitute a single business relationship such that in the event of default, the nondefaulting party is entitled to set off claims and apply property held by that party in respect of any transaction against obligations owed. The following tables present total gross derivative instrument assets and liabilities at December 31, 2018 and 2017, which are adjusted to reflect the effects of legally enforceable master netting agreements and cash collateral received or paid when calculating the net amount reported in the Consolidated Balance Sheets. Also included in the tables are financial instrument collateral related to legally enforceablemaster netting agreements that represents securities collateral received or pledged and customer cash collateral held at third party custodians. These amounts are not offset on the Consolidated Balance Sheets but are shown as a reduction to total derivative instrument assets and liabilities to derive net derivative assets and liabilities. These amounts are limited to the derivative asset/ liability balance, and accordingly, do not include excess collateral received/pledged. (Dollars in millions) Gross Amount Amount Offset Net Amount Presented in Consolidated Balance Sheets Held/Pledged Financial Instruments Net Amount December 31, 2018 Derivative instrument assets: Derivatives subject to master netting arrangement or similar arrangement $2,425 $1,873 $552 $12 $540 Derivatives not subject to master netting arrangement or similar arrangement 20 — 20 — 20 Exchange traded derivatives 186 119 67 — 67 Total derivative instrument assets $2,631 $1,992 $639 1 $12 $627 Derivative instrument liabilities: Derivatives subject to master netting arrangement or similar arrangement $2,521 $2,187 $334 $14 $320 Derivatives not subject to master netting arrangement or similar arrangement 76 — 76 — 76 Exchange traded derivatives 119 119 — — — Total derivative instrument liabilities $2,716 $2,306 $410 2 $14 $396 December 31, 2017 Derivative instrument assets: Derivatives subject to master netting arrangement or similar arrangement $3,491 $2,923 $568 $28 $540 Derivatives not subject to master netting arrangement or similar arrangement 18 — 18 — 18 Exchange traded derivatives 395 179 216 — 216 Total derivative instrument assets $3,904 $3,102 $802 1 $28 $774 Derivative instrument liabilities: Derivatives subject to master netting arrangement or similar arrangement $4,128 $3,855 $273 $27 $246 Derivatives not subject to master netting arrangement or similar arrangement 130 — 130 — 130 Exchange traded derivatives 184 179 5 — 5 Total derivative instrument liabilities $4,442 $4,034 $408 2 $27 $381 1 At December 31, 2018, $639 million, net of $338 million offsetting cash collateral, is recognized in Trading assets and derivative instruments within the Company's Consolidated Balance Sheets. At December 31, 2017, $802 million, net of $371 million offsetting cash collateral, is recognized in Trading assets and derivative instruments within the Company's Consolidated Balance Sheets. 2 At December 31, 2018, $410million, net of $652million offsetting cash collateral, is recognized inTrading liabilities and derivative instruments within the Company's Consolidated Balance Sheets. At December 31, 2017, $408 million, net of $1.3 billion offsetting cash collateral, is recognized in Trading liabilities and derivative instruments within the Company's Consolidated Balance Sheets.