NOTE 15 - BUSINESS SEGMENT REPORTING

The Company has six business segments used to measure business activities: Retail Banking, Diversified Commercial Banking, CRE, CIB, Mortgage, and W&IM with the remainder in Corporate Other and Treasury. The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. For a further discussion concerning SunTrust’s business segments, see Note 22, “Business Segment Reporting”, to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Because the business segment results are presented based on management accounting practices, the transition to the consolidated results, which are prepared under U.S. GAAP, creates certain differences which are reflected in Reconciling Items in the tables below.

For business segment reporting purposes, the basis of presentation in the accompanying discussion includes the following:

•

Net interest income – All net interest income is presented on a FTE basis. The revenue gross-up has been applied to tax-exempt loans and investments to make them comparable to other taxable products. The segments have also been matched maturity funds transfer priced, generating credits or charges based on the economic value or cost created by the assets and liabilities of each segment. The mismatch between funds credits and funds charges at the segment level resides in Reconciling Items. The change in the matched maturity funds mismatch is generally attributable to corporate balance sheet management strategies.


•	Provision for credit losses - Represents net charge-offs by segment. The difference between the segment net charge-offs and the consolidated provision for credit losses is reported in Reconciling Items.

•

Provision/(benefit) for income taxes - Calculated using a nominal income tax rate for each segment. This calculation includes the impact of various income adjustments, such as the reversal of the FTE gross up on tax-exempt assets, tax adjustments, and credits that are unique to each business segment. The difference between the calculated provision/(benefit) for income taxes at the segment level and the consolidated provision/(benefit) for income taxes is reported in Reconciling Items.

The segment’s financial performance is comprised of direct financial results as well as various allocations that for internal management reporting purposes provide an enhanced view of analyzing the segment’s financial performance. The internal allocations include the following:


•	Operational Costs – Expenses are charged to the segments based on various statistical volumes multiplied by activity based cost rates. As a result of the activity based costing process, planned residual expenses are also allocated to the segments. The recoveries for the majority of these costs are in the Corporate Other and Treasury segment.


•	Support and Overhead Costs – Expenses not directly attributable to a specific segment are allocated based on various drivers (e.g., number of full-time equivalent employees and volume of loans and deposits). The recoveries for these allocations are in Corporate Other and Treasury.


•	Sales and Referral Credits – Segments may compensate another segment for referring or selling certain products. The majority of the revenue resides in the segment where the product is ultimately managed.

The application and development of management reporting methodologies is a dynamic process and is subject to periodic enhancements. The implementation of these enhancements to the internal management reporting methodology may materially affect the results disclosed for each segment with no impact on consolidated results. Whenever significant changes to management reporting methodologies take place, the impact of these changes is quantified and prior period information is reclassified wherever practicable.



	Three Months Ended September 30, 2011
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE			CIB			Mortgage			W&IM			Corporate Other and Treasury			Reconciling Items			Consolidated
Average total assets		$40,821		$25,242		$7,557			$23,990			$33,159			$8,370			$31,389			$1,548			$172,076
Average total liabilities	76,820		20,541		1,535			17,857			3,705			12,812			16,235			2,571			152,076
Average total equity	—		—		—			—			—			—			—			20,000			20,000
Net interest income		$640		$159		$34			$126			$121			$105			$132			($54	)		$1,263
FTE adjustment	—		26		—			1			—			—			1			2			30
Net interest income - FTE ¹	640		185		34			127			121			105			133			(52		)	1,293
Provision for credit losses ²	181		11		133			(3		)	144			26			—			(145		)	347
Net interest income/(loss) after provision for credit losses	459		174		(99		)	130			(23		)	79			133			93			946
Total noninterest income	286		67		25			109			115			202			103			(4		)	903
Total noninterest expense	654		123		100			139			318			235			(2		)	(7		)	1,560
Income/(loss) before provision/(benefit) for income taxes	91		118		(174		)	100			(226		)	46			238			96			289
Provision/(benefit) for income taxes ³	33		42		(85		)	36			(88		)	19			80			38			75
Net income/(loss) including income attributable to noncontrolling interest	58		76		(89		)	64			(138		)	27			158			58			214
Net income/(loss) attributable to noncontrolling interest	—		—		—			—			—			(4		)	2			1			(1		)
Net income/(loss)		$58		$76		($89	)		$64			($138	)		$31			$156			$57			$215

	Three Months Ended September 30, 2010
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE			CIB			Mortgage			W&IM			Corporate Other and Treasury			Reconciling Items			Consolidated
Average total assets		$39,105		$24,633		$10,395			$20,900			$34,556			$8,941			$33,321			$148			$171,999
Average total liabilities	74,945		19,159		1,467			16,478			4,135			11,723			18,742			2,259			148,908
Average total equity	—		—		—			—			—			—			—			23,091			23,091
Net interest income		$630		$142		$38			$98			$123			$97			$117			($7	)		$1,238
FTE adjustment	—		26		—			—			—			—			2			—			28
Net interest income - FTE ¹	630		168		38			98			123			97			119			(7		)	1,266
Provision for credit losses ²	229		23		156			—			265			15			—			(73		)	615
Net interest income/(loss) after provision for credit losses	401		145		(118		)	98			(142		)	82			119			66			651
Total noninterest income	278		62		21			196			272			196			24			(2		)	1,047
Total noninterest expense	623		107		120			121			296			233			1			(2		)	1,499
Income/(loss) before provision/(benefit) for income taxes	56		100		(217		)	173			(166		)	45			142			66			199
Provision/(benefit) for income taxes ³	20		37		(103		)	64			(63		)	16			44			27			42
Net income/(loss) including income attributable to noncontrolling interest	36		63		(114		)	109			(103		)	29			98			39			157
Net income attributable to noncontrolling interest	—		—		—			—			—			1			2			1			4
Net income/(loss)		$36		$63		($114	)		$109			($103	)		$28			$96			$38			$153

¹Net interest income is FTE and is presented on a matched maturity funds transfer price basis for the segments.

²Provision for credit losses represents net charge-offs for the segments.

³Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.



	Nine Months Ended September 30, 2011
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE			CIB			Mortgage			W&IM		Corporate Other and Treasury			Reconciling Items			Consolidated
Average total assets		$40,752		$25,113		$8,230			$22,651			$33,681			$8,489		$31,348			$1,622			$171,886
Average total liabilities	76,582		20,459		1,479			17,620			3,487			12,658		16,058			2,682			151,025
Average total equity	—		—		—			—			—			—		—			20,861			20,861
Net interest income		$1,897		$456		$105			$360			$362			$305		$379			($93	)		$3,771
FTE adjustment	—		76		1			2			—			—		5			—			84
Net interest income - FTE ¹	1,897		532		106			362			362			305		384			(93		)	3,855
Provision for credit losses ²	593		49		353			(1		)	520			54		(1		)	(381		)	1,186
Net interest income/(loss) after provision for credit losses	1,304		483		(247		)	363			(158		)	251		385			288			2,669
Total noninterest income	830		191		73			477			271			624		254			(22		)	2,698
Total noninterest expense	1,936		358		316			433			847			710		(11		)	(22		)	4,567
Income/(loss) before provision/(benefit) for income taxes	198		316		(490		)	407			(734		)	165		650			288			800
Provision/(benefit) for income taxes ³	72		114		(242		)	149			(283		)	61		236			113			220
Net income/(loss) including income attributable to noncontrolling interest	126		202		(248		)	258			(451		)	104		414			175			580
Net income attributable to noncontrolling interest	—		—		—			—			—			—		7			—			7
Net income/(loss)		$126		$202		($248	)		$258			($451	)		$104		$407			$175			$573

	Nine Months Ended September 30, 2010
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE			CIB			Mortgage			W&IM		Corporate Other and Treasury			Reconciling Items			Consolidated
Average total assets		$38,856		$25,039		$11,171			$19,597			$34,627			$8,974		$32,557			$748			$171,569
Average total liabilities	74,411		19,864		1,667			15,272			3,581			11,449		20,040			2,702			148,986
Average total equity	—		—		—			—			—			—		—			22,583			22,583
Net interest income		$1,870		$408		$124			$272			$331			$280		$350			($48	)		$3,587
FTE adjustment	—		80		—			1			—			—		8			—			89
Net interest income - FTE ¹	1,870		488		124			273			331			280		358			(48		)	3,676
Provision for credit losses ²	765		88		344			37			956			44		—			(96		)	2,138
Net interest income/(loss) after provision for credit losses	1,105		400		(220		)	236			(625		)	236		358			48			1,538
Total noninterest income	857		173		61			449			397			578		193			(11		)	2,697
Total noninterest expense	1,850		335		324			352			812			672		29			(12		)	4,362
Income/(loss) before provision/(benefit) for income taxes	112		238		(483		)	333			(1,040		)	142		522			49			(127		)
Provision/(benefit) for income taxes ³	39		87		(242		)	123			(395		)	52		170			25			(141		)
Net income/(loss) including income attributable to noncontrolling interest	73		151		(241		)	210			(645		)	90		352			24			14
Net income attributable to noncontrolling interest	—		—		—			—			1			1		7			—			9
Net income/(loss)		$73		$151		($241	)		$210			($646	)		$89		$345			$24			$5

¹Net interest income is FTE and is presented on a matched maturity funds transfer price basis for the segments.

²Provision for credit losses represents net charge-offs for the segments.

³Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.