SunTrust 2008 Annual Report Download - page 112

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
Note 3 - Funds Sold and Securities Purchased Under Agreements to Resell
Funds sold and securities purchased under agreements to resell at December 31 were as follows:
(Dollars in thousands) 2008 2007
Federal funds $134,000 $400,300
Resell agreements 856,614 947,029
Total funds sold and securities purchased
under agreements to resell $990,614 $1,347,329
Securities purchased under agreements to resell are collateralized by U.S. government or agency securities and are carried at
the amounts at which securities will be subsequently resold. The Company takes possession of all securities under
agreements to resell and performs the appropriate margin evaluation on the acquisition date based on market volatility, as
necessary. The Company requires collateral between 100% and 106% of the underlying securities. The total market value of
the collateral held was $866.7 million and $999.0 million at December 31, 2008 and 2007, of which $246.3 million and
$527.8 million was repledged, respectively.
Note 4 - Trading Assets and Liabilities
The fair values of the components of trading assets and liabilities at December 31 were as follows:
(Dollars in thousands) 2008 2007
Trading Assets
U.S. government and agency securities $788,166 $758,129
U.S. government-sponsored enterprises 2,339,469 3,375,361
Corporate and other debt securities 1,538,010 2,821,737
Equity securities 116,788 242,680
Mortgage-backed securities 95,693 938,930
Derivative contracts14,701,782 1,977,401
Municipal securities 159,135 171,203
Commercial paper 399,611 2,368
Other securities and loans 257,615 230,570
Total trading assets $10,396,269 $10,518,379
Trading Liabilities
U.S. government and agency securities $440,408 $404,501
Corporate and other debt securities 146,805 126,437
Equity securities 13,263 68
Mortgage-backed securities -61,672
Derivative contracts12,640,308 1,567,707
Total trading liabilities $3,240,784 $2,160,385
1Excludes IRLCs accounted for as derivatives, as well as derivatives economically hedging loans held for sale and loans
reported at fair value. The fair value of these derivatives is included in other assets and liabilities.
The Company purchased certain trading securities, classified primarily within corporate and other debt securities, during the
latter half of 2007 from (i) an institutional private placement fund managed by RidgeWorth Capital Management, Inc.
(“RidgeWorth”), a subsidiary of the Company, (ii) Three Pillars Funding LLC, a multi-seller commercial paper conduit
sponsored by the Company, and (iii) certain money market funds managed by RidgeWorth. The acquired securities were
predominantly AAA or AA-rated at the time they were originally purchased by these entities, but the majority of the
securities have been downgraded during 2008 and the issuers of the SIV securities are also undergoing enforcement
proceedings. In addition, in the fourth quarter of 2007, the Company retained the super senior interest in a securitization of
commercial leveraged loans. Total valuation losses recorded with respect to these instruments during 2008 and 2007 were
$255.9 million and $527.7 million, respectively. The outstanding balance of these securities was approximately $250.0
million and $2.9 billion at December 31, 2008 and 2007, respectively. These securities had an acquisition cost of $3.5 billion
in 2007.
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