NOTE 3 - FEDERAL FUNDS SOLD AND SECURITIES BORROWED OR PURCHASED UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Fed funds sold and securities borrowed or purchased under agreements to resell were as follows:



(Dollars in millions)	June 30, 2014		December 31, 2013
Fed funds sold		$103		$75
Securities borrowed or purchased	334		184
Resell agreements	719		724
Total fed funds sold and securities borrowed or purchased under agreements to resell		$1,156		$983

Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which securities will be subsequently resold. Securities borrowed are primarily collateralized by corporate securities. The Company takes possession of all securities purchased under agreements to resell and securities borrowed and performs the appropriate margin evaluation on the acquisition date based on market volatility, as necessary. It is the Company's policy to obtain possession of collateral with a fair value between 95% to 110% of the principal amount loaned under resale and securities borrowing agreements. At June 30, 2014 and December 31, 2013, the total market value of collateral held was $1.1 billion and $913 million, of which $227 million and $234 million was repledged, respectively.

At June 30, 2014 and December 31, 2013, the Company had $814 million and $731 million of trading assets pledged to secure $819 million and $717 million of repurchase agreements, respectively.

Netting of Securities - Repurchase and Resell Agreements

The Company has various financial assets and financial liabilities that are subject to enforceable master netting agreements or similar agreements. The Company's derivatives that are subject to enforceable master netting agreements or similar agreements are discussed in Note 12, "Derivative Financial Instruments." Securities purchased under agreements to resell and securities sold under agreements to repurchase are governed by a MRA. Under the terms of the MRA, 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. Any payments, deliveries, or other transfers may be applied against each other and netted. These amounts are limited to the contract asset/liability balance, and accordingly, do not include excess collateral received/pledged.

The following table presents the Company's eligible securities borrowed or purchased under agreements to resell and securities sold under agreements to repurchase at June 30, 2014 and December 31, 2013:



(Dollars in millions)	Gross Amount		Amount Offset		Net Amount Presented in Consolidated Balance Sheets			Held/Pledged Financial Instruments		Net Amount
June 30, 2014
Financial assets:
Securities borrowed or purchased under agreements to resell		$1,053		$—		$1,053	^1,2		$1,040		$13
Financial liabilities:
Securities sold under agreements to repurchase	2,192		—		2,192		¹	2,192		—

December 31, 2013
Financial assets:
Securities borrowed or purchased under agreements to resell		$908		$—		$908	^1,2		$899		$9
Financial liabilities:
Securities sold under agreements to repurchase	1,759		—		1,759		¹	1,759		—

¹None of the Company's repurchase and reverse repurchase transactions met the right of setoff criteria for net balance sheet presentation at June 30, 2014 and December 31, 2013.

²Excludes $103 million and $75 million of Fed funds sold which are not subject to a master netting agreement at June 30, 2014 and December 31, 2013