NOTE 3 - TRADING ASSETS AND LIABILITIES AND DERIVATIVE INSTRUMENTS

The fair values of the components of trading assets and liabilities and derivative instruments were as follows:



(Dollars in millions)	June 30, 2016		December 31, 2015
Trading Assets and Derivative Instruments:
U.S. Treasury securities		$531		$538
Federal agency securities	396		588
U.S. states and political subdivisions	54		30
MBS - agency	826		553
CLO securities	3		2
Corporate and other debt securities	499		468
CP	139		67
Equity securities	53		66
Derivative instruments ¹	1,669		1,152
Trading loans ²	2,680		2,655
Total trading assets and derivative instruments		$6,850		$6,119

Trading Liabilities and Derivative Instruments:
U.S. Treasury securities		$473		$503
MBS - agency	3		37
Corporate and other debt securities	311		259
Derivative instruments ¹	458		464
Total trading liabilities and derivative instruments		$1,245		$1,263

¹Amounts include the impact of offsetting cash collateral received from and paid to the same derivative counterparties, and the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement or similar agreement exists.

² Includes loans related to TRS.

Various trading and derivative instruments are used as part of the Company’s overall balance sheet management strategies and to support client requirements executed through the Bank and/or the Company's broker/dealer subsidiary. The Company manages the potential market volatility associated with trading instruments with appropriate risk management strategies. The size, volume, and nature of the trading products and derivative instruments can vary based on economic conditions as well as client-specific and Company-specific asset or liability positions. Product offerings to clients include debt securities, loans traded in the secondary market, equity securities, derivative contracts, and other similar financial instruments. Other trading-related activities include acting as a market maker for certain debt and equity security transactions, derivative instrument transactions, and foreign exchange transactions. The Company also uses derivatives to manage its interest rate and market risk from non-trading activities. The Company has policies and procedures to manage market risk associated with client trading and non-trading activities, and assumes a limited degree of market risk by managing the size and nature of its exposure. For valuation assumptions and additional information related to the Company's trading products and derivative instruments, see Note 13, “Derivative Financial Instruments,” and the “Trading Assets and Derivative Instruments and Securities Available for Sale” section of Note 14, “Fair Value Election and Measurement.”

Pledged trading assets are presented in the following table:



(Dollars in millions)	June 30, 2016		December 31, 2015
Pledged trading assets to secure repurchase agreements ¹		$821		$986
Pledged trading assets to secure derivative agreements	467		393
Pledged trading assets to secure other arrangements	40		40

¹ Repurchase agreements secured by collateral totaled $787 million and $950 million at June 30, 2016 and December 31, 2015, respectively.