NOTE 2 - FEDERAL FUNDS SOLD AND SECURITIES FINANCING ACTIVITIES

Federal Funds Sold and Securities Borrowed or Purchased

Under Agreements to Resell

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



(Dollars in millions)	March 31, 2015		December 31, 2014
Fed funds sold		$—		$38
Securities borrowed or purchased	262		290
Resell agreements	971		832
Total fed funds sold and securities borrowed or purchased under agreements to resell		$1,233		$1,160

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 a 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 resell and securities borrowing agreements. At March 31, 2015 and December 31, 2014, the total market value of collateral held was $1.2 billion and $1.1 billion, of which $194 million and $222 million was repledged, respectively.

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are accounted for as secured borrowings. The following table presents the Company’s related activity, by collateral type and remaining contractual maturity:



	March 31, 2015		December 31, 2014
(Dollars in millions)	Overnight and Continuous		Overnight and Continuous		Up to 30 days		Total
U.S. Treasury securities		$167		$376		$—		$376
Federal agency securities	101		231		—		231
MBS - agency	1,105		1,059		45		1,104
CP	101		238		—		238
Corporate and other debt securities	371		327		—		327
Total securities sold under agreements to repurchase		$1,845		$2,231		$45		$2,276

For these securities sold under agreements to repurchase, the Company would be obligated to provide additional collateral in the event of a significant decline in fair value of the collateral pledged. This risk is managed by monitoring the liquidity and credit quality of the collateral, as well as the maturity profile of the transactions.

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 13, "Derivative Financial Instruments." The following table presents the Company's securities borrowed or purchased under agreements to resell and securities sold under agreements to repurchase subject to MRAs. Under the terms of the MRA, all transactions between the Company and a 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 against obligations owed. Any payments, deliveries, or other transfers may be applied against each other and presented net on the Company's Consolidated Balance Sheets, provided criteria are met that permit balance sheet netting. At March 31, 2015 and December 31, 2014, there were no such transactions subject to a legally enforceable MRA that were eligible for balance sheet netting.

Financial instrument collateral received or pledged related to exposures subject to legally enforceable MRAs are not netted on the Consolidated Balance Sheets, but are presented in the following table as a reduction to the net amount presented in the Consolidated Balance Sheets to derive the aggregate collateral deficits by counterparty. These collateral amounts presented are limited to the related recognized 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 ¹			Held/Pledged Financial Instruments ²		Net Amount
March 31, 2015
Financial assets:
Securities borrowed or purchased under agreements to resell		$1,233		$—		$1,233			$1,225		$8
Financial liabilities:
Securities sold under agreements to repurchase	1,845		—		1,845			1,845		—

December 31, 2014
Financial assets:
Securities borrowed or purchased under agreements to resell		$1,122		$—		$1,122	³		$1,112		$10
Financial liabilities:
Securities sold under agreements to repurchase	2,276		—		2,276			2,276		—

¹ None of the Company's repurchase or resell transactions met the right of setoff criteria for net balance sheet presentation at March 31, 2015 and December 31, 2014.

²Represents collateral received or pledged, limited for presentation purposes to the amount of the related recognized asset or liability for each counterparty, and therefore, may be less than the aggregate amount of collateral actually held/pledged.

³Excludes $38 million of Fed funds sold which are not subject to a master netting agreement at December 31, 2014.