NOTE 14 - BUSINESS SEGMENT REPORTING

The Company has three business segments used to measure business activity: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking, with the remainder in Corporate Other. 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. The segment structure was revised during the first quarter of 2012 from the six segments the Company utilized during 2011. The revised segment structure was done in conjunction with organizational as well as corresponding management reporting changes made by the Company during 2012. The following is a description of the new segments and their composition.

The Consumer Banking and Private Wealth Management segment is made up of two primary businesses: Consumer Banking and Private Wealth Management.

•

Consumer Banking provides services to consumers through an extensive network of traditional and in-store branches, ATMs, the internet (www.suntrust.com), and telephone (1-800-SUNTRUST). Financial products and services offered to consumers include consumer deposits, home equity lines, consumer lines, indirect auto, student lending, bank card, and other consumer loan and fee-based products. Consumer Banking also serves as an entry point for clients and provides services for other lines of business.

•

The Private Wealth Management business provides a full array of wealth management products and professional services to both individual and institutional clients including brokerage, professional investment management, and trust services to clients seeking active management of their financial resources. Private Wealth Management's primary businesses include Private Banking, STIS and IIS. Private Banking offers a full array of loan and deposit products to clients. STIS offers discount/online and full service brokerage services to individual clients. IIS includes Employee Benefit Solutions, Foundations & Endowments Specialty Group, and Escrow Services.

The Wholesale Banking segment includes the following six businesses:

•

Corporate & Investment Banking offers a wide array of traditional banking products (lending and deposits) and investment banking services to both middle market and corporate banking clients with annual revenues greater than $750 million and is largely focused within the following selected industry sectors: consumer and retail, energy, financial services and technology, healthcare, and media and communications. Comprehensive investment banking products and services are provided by STRH to clients in both Wholesale Banking and Private Wealth Management, including strategic advice, raising capital, and financial risk management.


•	Diversified Commercial Banking offers an array of traditional banking products and investment banking services as needed for our small business clients, commercial clients, dealer services (financing dealer floor plan inventories), not-for-profit and government entities, and insurance premium financing through Premium Assignment Corporation.

•

Commercial Real Estate provides financial solutions for commercial real estate developers and investors, including construction, mini-perm, and permanent real estate financing as well as tailored financing and equity investment solutions for community development and affordable housing projects delivered through SunTrust Community Capital. Equipment and lease financing products and services offered to clients across the entire Company are also managed from this line of business.


•	GenSpring provides family office solutions to ultra high net worth individuals and their families. Utilizing teams of multi-disciplinary specialists with expertise in investments, tax, accounting, estate planning and other wealth management disciplines, GenSpring helps families manage and sustain their wealth across multiple generations.

•

RidgeWorth, an SEC registered investment advisor, serves as investment manager for the RidgeWorth Funds as well as individual clients. RidgeWorth is also a holding company with ownership in other institutional asset management boutiques offering a wide array of equity, alternative, fixed income, and liquidity management capabilities. These boutiques include Ceredex Value Advisors, Certium Asset Management, Seix Investment Advisors, Inc., Silvant Capital Management, StableRiver Capital Management, and Zevenbergen Capital Investments, LLC.


•	Treasury and Payment Solutions offers treasury and payment solution services including commercial card products across all of the Company's businesses and fiduciary services and provides a variety of treasury management solutions such as on-line cash manager, lockbox, business sweep, and merchant services.

The Mortgage Banking segment offers residential mortgage products nationally through its retail, broker, and correspondent channels, as well as via the internet (www.suntrust.com) and by telephone (1-800-SUNTRUST). These products are either sold in the secondary market, primarily with servicing rights retained, or held in the Company's loan portfolio. The line of business services loans for itself, for other SunTrust lines of business, and for other investors. The line of business also includes ValuTree Real Estate Services, LLC, a tax service subsidiary.

Corporate Other includes management of the Company's investment securities portfolio, long-term debt, end user derivative instruments, short-term liquidity and funding activities, balance sheet risk management, and most real estate assets. Other components include Enterprise Information Services, which is the primary information technology and operations group and includes SunTrust Online and Branch Operations; Finance which includes the Corporate Real Estate group, Corporate Strategies, and Procurement; Marketing which includes Communications; Human Resources, Corporate Risk Management, Legal and Compliance, and Executive Management.

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.

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.


•	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.


•	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 March 31, 2012
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Average total assets		$46,105		$63,358		$35,235			$31,250			$907			$176,855
Average total liabilities	77,601		55,230		3,828			20,410			(470		)	156,599
Average total equity	—		—		—			—			20,256			20,256
Net interest income		$634		$429		$126			$126			($4	)		$1,311
FTE adjustment	—		29		—			1			1			31
Net interest income - FTE ¹	634		458		126			127			(3		)	1,342
Provision for credit losses ²	155		101		166			—			(105		)	317
Net interest income/(loss) after provision for credit losses	479		357		(40		)	127			102			1,025
Total noninterest income	323		379		157			21			(4		)	876
Total noninterest expense	707		515		334			(11		)	(4		)	1,541
Income/(loss) before provision/(benefit) for income taxes	95		221		(217		)	159			102			360
Provision/(benefit) for income taxes ³	34		59		(85		)	51			41			100
Net income/(loss) including income attributable to noncontrolling interest	61		162		(132		)	108			61			260
Net income attributable to noncontrolling interest	—		8		—			2			—			10
Net income/(loss)		$61		$154		($132	)		$106			$61			$250



	Three Months Ended March 31, 2011
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Average total assets		$43,418		$61,282		$34,537			$30,880			$2,949			$173,066
Average total liabilities	76,885		53,958		3,693			15,480			(57		)	149,959
Average total equity	—		—		—			—			23,107			23,107
Net interest income		$619		$389		$120			$120			$1			$1,249
FTE adjustment	—		26		—			2			—			28
Net interest income - FTE ¹	619		415		120			122			1			1,277
Provision for credit losses ²	202		146		223			—			(124		)	447
Net interest income/(loss) after provision for credit losses	417		269		(103		)	122			125			830
Total noninterest income	359		388		81			68			(13		)	883
Total noninterest expense	703		533		248			(7		)	(12		)	1,465
Income/(loss) before provision/(benefit) for income taxes	73		124		(270		)	197			124			248
Provision/(benefit) for income taxes ³	27		23		(104		)	68			47			61
Net income/(loss) including income attributable to noncontrolling interest	46		101		(166		)	129			77			187
Net income attributable to noncontrolling interest	—		5		—			2			—			7
Net income/(loss)		$46		$96		($166	)		$127			$77			$180

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.