NOTE 15 - BUSINESS SEGMENT REPORTING

The Company has three 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 evaluated by management. During the second quarter of 2013, branch-managed business banking clients were transferred from Wholesale Banking to Consumer Banking and Private Wealth Management, and all periods presented reflect this transfer.The following is a description of the segments and their composition, which reflects the transfer of branch-managed business banking clients.

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

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

•

Private Wealth Management provides a full array of wealth management products and professional services to both individual and institutional clients including loans, deposits, brokerage, professional investment management, and trust services to clients seeking active management of their financial resources. Institutional clients are served by the IIS business. Discount/online and full service brokerage products are offered to individual clients through STIS. Private Wealth Management also includes GenSpring, which 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 wealth across multiple generations.

The Wholesale Banking segment includes the following five businesses:

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CIB delivers comprehensive capital markets, corporate and investment banking solutions, including advisory, capital raising, and financial risk management, to clients in the Wholesale Banking and Private Wealth Management segment. Investment Banking and Corporate Banking teams within CIB serve clients across the nation, offering a full suite of traditional banking and investment banking products and services to companies with annual revenues typically greater than $100 million. Investment Banking serves select industry segments including consumer and retail, energy, financial services, healthcare, industrials, media and communications, real estate, and technology. Corporate Banking serves clients across diversified industry sectors based on size, complexity, and frequency of capital markets issuance. Formerly managed within Commercial Real Estate, equipment lease financing solutions (through SunTrust Equipment Finance & Leasing) and corporate insurance premium financing (through Premium Assignment Corporation) are also managed within CIB.


•	Commercial & Business Banking offers an array of traditional banking products and investment banking services as needed by clients in the commercial, dealer services (financing dealer floor plan inventories), not-for-profit and government, and small business sectors.


•	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.

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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 and fixed income capabilities. These boutiques include Ceredex Value Advisors, Certium Asset Management, Seix Investment Advisors, Silvant Capital Management, StableRiver Capital Management, and Zevenbergen Capital Investments.

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Treasury & Payment Solutions provides all of SunTrust business clients with services required to manage their payments and receipts combined with the ability to manage and optimize their deposits across all aspects of their business. Treasury & Payment Solutions operates all electronic and paper payment types, including card, wire transfer, ACH, check, and cash, plus provides clients the means to manage their accounts electronically online both domestically and internationally.

Mortgage Banking 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. Mortgage Banking services loans for itself and for other investors and 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. Additionally, it includes Enterprise Information Services, which is the primary information technology and operations group, Corporate Real Estate, Marketing, SunTrust Online, Human Resources, Finance, Corporate Risk Management, Legal and Compliance, Branch Operations, Communications, Procurement, 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:

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Net interest income – Net interest income is presented on a FTE basis to make tax-exempt assets 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.

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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 segment. The difference between the calculated provision/(benefit) for income taxes at the segment level and the consolidated provision 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 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. Prior year results have been restated to reflect the transfer of branch-managed business banking clients from Wholesale Banking to Consumer Banking and Private Wealth Management.



	Three Months Ended June 30, 2013
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Balance Sheets:
Average total assets		$45,012		$66,498		$32,711			$26,880			$1,436			$172,537
Average total liabilities	84,791		46,561		4,429			15,609			(125		)	151,265
Average total equity	—		—		—			—			21,272			21,272

Statements of Income/(loss):
Net interest income		$646		$397		$141			$72			($45	)		$1,211
FTE adjustment	—		29		—			2			—			31
Net interest income - FTE ¹	646		426		141			74			(45		)	1,242
Provision for credit losses ²	99		18		61			—			(32		)	146
Net interest income after provision for credit losses	547		408		80			74			(13		)	1,096
Total noninterest income	372		333		131			26			(4		)	858
Total noninterest expense	690		405		339			(33		)	(4		)	1,397
Income/(loss) before provision/(benefit) for income taxes	229		336		(128		)	133			(13		)	557
Provision/(benefit) for income taxes ³	84		105		(52		)	43			(3		)	177
Net income/(loss) including income attributable to noncontrolling interest	145		231		(76		)	90			(10		)	380
Net income attributable to noncontrolling interest	—		1		—			2			—			3
Net income/(loss)		$145		$230		($76	)		$88			($10	)		$377



	Three Months Ended June 30, 2012
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Balance Sheets:
Average total assets		$47,161		$63,870		$35,787			$29,324			$1,773			$177,915
Average total liabilities	85,333		45,987		4,347			21,956			(180		)	157,443
Average total equity	—		—		—			—			20,472			20,472

Statements of Income/(loss):
Net interest income		$682		$376		$131			$94			($9	)		$1,274
FTE adjustment	—		32		—			1			(1		)	32
Net interest income - FTE ¹	682		408		131			95			(10		)	1,306
Provision for credit losses ²	128		57		165			—			(50		)	300
Net interest income/(loss) after provision for credit losses	554		351		(34		)	95			40			1,006
Total noninterest income	389		334		179			40			(2		)	940
Total noninterest expense	756		450		343			(2		)	(1		)	1,546
Income/(loss) before provision/(benefit) for income taxes	187		235		(198		)	137			39			400
Provision/(benefit) for income taxes ³	67		67		(82		)	53			18			123
Net income/(loss) including income attributable to noncontrolling interest	120		168		(116		)	84			21			277
Net income attributable to noncontrolling interest	—		—		—			3			(1		)	2
Net income/(loss)		$120		$168		($116	)		$81			$22			$275

¹Presented 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.



	Six Months Ended June 30, 2013
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Balance Sheets:
Average total assets		$45,065		$66,083		$32,947			$26,578			$1,502			$172,175
Average total liabilities	85,096		46,873		4,383			14,754			(126		)	150,980
Average total equity	—		—		—			—			21,195			21,195

Statements of Income/(loss):
Net interest income		$1,293		$783		$269			$157			($70	)		$2,432
FTE adjustment	—		58		—			3			—			61
Net interest income - FTE ¹	1,293		841		269			160			(70		)	2,493
Provision for credit losses ²	207		46		152			—			(47		)	358
Net interest income after provision for credit losses	1,086		795		117			160			(23		)	2,135
Total noninterest income	729		639		329			31			(7		)	1,721
Total noninterest expense	1,392		801		609			(35		)	(7		)	2,760
Income/(loss) before provision/(benefit) for income taxes	423		633		(163		)	226			(23		)	1,096
Provision/(benefit) for income taxes ³	155		195		(67		)	71			4			358
Net income/(loss) including income attributable to noncontrolling interest	268		438		(96		)	155			(27		)	738
Net income attributable to noncontrolling interest	—		4		—			5			—			9
Net income/(loss)		$268		$434		($96	)		$150			($27	)		$729



	Six Months Ended June 30, 2012
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Balance Sheets:
Average total assets		$47,114		$63,343		$35,511			$30,077			$1,340			$177,385
Average total liabilities	85,059		47,017		4,088			21,182			(325		)	157,021
Average total equity	—		—		—			—			20,364			20,364

Statements of Income/(loss):
Net interest income		$1,367		$746		$257			$221			($6	)		$2,585
FTE adjustment	—		61		—			2			—			63
Net interest income - FTE ¹	1,367		807		257			223			(6		)	2,648
Provision for credit losses ²	292		148		331			—			(154		)	617
Net interest income/(loss) after provision for credit losses	1,075		659		(74		)	223			148			2,031
Total noninterest income	761		664		336			61			(6		)	1,816
Total noninterest expense	1,528		897		676			(7		)	(7		)	3,087
Income/(loss) before provision/(benefit) for income taxes	308		426		(414		)	291			149			760
Provision/(benefit) for income taxes ³	111		116		(168		)	102			62			223
Net income/(loss) including income attributable to noncontrolling interest	197		310		(246		)	189			87			537
Net income attributable to noncontrolling interest	—		8		—			5			(1		)	12
Net income/(loss)		$197		$302		($246	)		$184			$88			$525

¹Presented 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.