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Business Segment Reporting
 9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Business Segment Reporting
NOTE 16 - 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 client served, and they reflect the manner in which financial information is evaluated by management. 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.

•
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 Institutional Investment Solutions 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 four businesses:

•
CIB delivers comprehensive capital markets, as well as corporate and investment banking solutions, including advisory, capital raising, and financial risk management, with the client-first goal of best serving the needs of both public and private companies in the Wholesale Banking segment and Private Wealth Management business. 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 $150 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. Also managed within CIB is the Equipment Finance Group, which provides lease financing solutions (through SunTrust Equipment Finance & Leasing).

•
Commercial & Business Banking offers an array of traditional banking products, including cash management services and investment banking solutions via STRH to commercial clients (generally those with average revenues $1 million to $150 million), not-for-profit organizations, and governmental entities, as well as auto dealer financing (floor plan inventory financing). Also managed within Commercial & Business Banking is the Premium Assignment Corporation, which creates corporate insurance premium financing solutions.

•
Commercial Real Estate provides a full range of financial solutions for commercial real estate developers, owners and investors including construction, mini-perm, and permanent real estate financing as well as tailored financing and equity investment solutions via STRH primarily through the REIT group focused on Real Estate Investment Trusts. The Institutional Real Estate team targets relationships with institutional advisors, private funds, sovereign wealth funds, and insurance companies and the Regional team focuses on real estate owners and developers through a regional delivery structure. Commercial Real Estate also offers tailored financing and equity investment solutions for community development and affordable housing owners/developers projects through SunTrust Community Capital with special expertise in Low Income Housing Tax Credits and New Market Tax Credits.

•
Treasury & Payment Solutions provides all 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 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, Communications, Procurement, and Executive Management. The financial results of RidgeWorth, including the gain on sale, are reflected in the Corporate Other segment. Prior to the sale of RidgeWorth, RidgeWorth's financial performance was reported in the Wholesale Banking segment. See Note 2, "Acquisitions/Dispositions," for additional information related to the sale of RidgeWorth.

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 – 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 this mismatch is generally attributable to corporate balance sheet management strategies.
•
Provision for credit losses – Represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to each segment's quarterly change in the ALLL and unfunded commitment reserve balances.
•
Provision/(benefit) for income taxes – Calculated using a blended 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/(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 Corporate Other.
•
Support and Overhead Costs – Expenses not directly attributable to a specific segment are allocated based on various drivers (e.g., number of 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 new provision for credit losses methodology.

 
Three Months Ended September 30, 2014
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$41,893

 

$63,552

 

$25,262

 

$40

 

$—

 

$130,747

Average consumer and commercial deposits
86,468

 
43,144

 
2,664

 
(81
)
 
—

 
132,195

Average total assets
47,338

 
75,137

 
30,414

 
27,627

 
2,917

 
183,433

Average total liabilities
87,167

 
49,775

 
3,085

 
21,256

 
(41
)
 
161,242

Average total equity
—

 
—

 
—

 
—

 
22,191

 
22,191

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$668

 

$423

 

$148

 

$70

 

($94
)
 

$1,215

FTE adjustment
—

 
34

 
—

 
1

 
1

 
36

Net interest income - FTE 1
668

 
457

 
148

 
71

 
(93
)
 
1,251

Provision for credit losses 2
40

 
9

 
44

 
—

 
—

 
93

Net interest income after provision for credit losses
628

 
448

 
104

 
71

 
(93
)
 
1,158

Total noninterest income
399

 
241

 
130

 
14

 
(4
)
 
780

Total noninterest expense
725

 
363

 
166

 
11

 
(6
)
 
1,259

Income before provision/(benefit) for income taxes
302

 
326

 
68

 
74

 
(91
)
 
679

Provision/(benefit) for income taxes 3
111

 
97

 
25

 
(107
)
 
(23
)
 
103

Net income including income attributable to noncontrolling interest
191

 
229

 
43

 
181

 
(68
)
 
576

Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
—

Net income

$191

 

$229

 

$43

 

$181

 

($68
)
 

$576

 
 
 
 
 
 
 
 
 
 
 
 

 
Three Months Ended September 30, 2013
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$40,529

 

$54,185

 

$27,920

 

$38

 

$—

 

$122,672

Average consumer and commercial deposits
84,159

 
39,269

 
3,247

 
(57
)
 
—

 
126,618

Average total assets
45,576

 
66,038

 
33,025

 
26,116

 
1,083

 
171,838

Average total liabilities
84,999

 
46,368

 
3,740

 
15,716

 
(12
)
 
150,811

Average total equity
—

 
—

 
—

 
—

 
21,027

 
21,027

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income/(Loss):
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$653

 

$392

 

$141

 

$76

 

($54
)
 

$1,208

FTE adjustment
—

 
31

 
—

 
1

 
—

 
32

Net interest income - FTE 1
653

 
423

 
141

 
77

 
(54
)
 
1,240

Provision for credit losses 2
23

 
52

 
20

 
—

 
—

 
95

Net interest income after provision for credit losses
630

 
371

 
121

 
77

 
(54
)
 
1,145

Total noninterest income
378

 
248

 
(1
)
 
57

 
(2
)
 
680

Total noninterest expense
691

 
381

 
638

 
22

 
(2
)
 
1,730

Income/(loss) before provision/(benefit) for income taxes
317

 
238

 
(518
)
 
112

 
(54
)
 
95

Provision/(benefit) for income taxes 3
117

 
75

 
(129
)
 
(160
)
 
(4
)
 
(101
)
Net income/(loss) including income attributable to noncontrolling interest
200

 
163

 
(389
)
 
272

 
(50
)
 
196

Net income attributable to noncontrolling interest
—

 
—

 
—

 
7

 
—

 
7

Net income/(loss)

$200

 

$163

 

($389
)
 

$265

 

($50
)
 

$189

 
 
 
 
 
 
 
 
 
 
 
 

1 Presented on a matched maturity funds transfer price basis for the segments.
2 Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances.
3 Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.
 
Nine Months Ended September 30, 2014
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$41,553

 

$61,307

 

$27,106

 

$44

 

$—

 

$130,010

Average consumer and commercial deposits
85,456

 
42,750

 
2,260

 
(97
)
 
—

 
130,369

Average total assets
47,154

 
72,647

 
31,067

 
26,413

 
2,817

 
180,098

Average total liabilities
86,202

 
49,440

 
2,763

 
19,751

 
(30
)
 
158,126

Average total equity
—

 
—

 
—

 
—

 
21,972

 
21,972

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income/(Loss):
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$1,963

 

$1,234

 

$422

 

$218

 

($208
)
 

$3,629

FTE adjustment
—

 
102

 
—

 
2

 
1

 
105

Net interest income - FTE 1
1,963

 
1,336

 
422

 
220

 
(207
)
 
3,734

Provision for credit losses 2
135

 
39

 
94

 
—

 
—

 
268

Net interest income after provision for credit losses
1,828

 
1,297

 
328

 
220

 
(207
)
 
3,466

Total noninterest income
1,142

 
827

 
350

 
222

 
(13
)
 
2,528

Total noninterest expense
2,170

 
1,168

 
717

 
91

 
(12
)
 
4,134

Income/(loss) before provision/(benefit) for income taxes
800

 
956

 
(39
)
 
351

 
(208
)
 
1,860

Provision/(benefit) for income taxes 3
294

 
305

 
(16
)
 
(40
)
 
(74
)
 
469

Net income/(loss) including income attributable to noncontrolling interest
506

 
651

 
(23
)
 
391

 
(134
)
 
1,391

Net income attributable to noncontrolling interest
—

 
—

 
—

 
11

 
—

 
11

Net income/(loss)

$506

 

$651

 

($23
)
 

$380

 

($134
)
 

$1,380

 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$40,360

 

$53,413

 

$27,830

 

$46

 

$—

 

$121,649

Average consumer and commercial deposits
84,447

 
39,030

 
3,501

 
(31
)
 
—

 
126,947

Average total assets
45,398

 
65,592

 
32,973

 
26,737

 
1,361

 
172,061

Average total liabilities
85,277

 
46,253

 
4,166

 
15,314

 
(87
)
 
150,923

Average total equity
—

 
—

 
—

 
—

 
21,138

 
21,138

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income/(Loss):
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$1,945

 

$1,165

 

$409

 

$238

 

($117
)
 

$3,640

FTE adjustment
—

 
90

 
—

 
2

 
1

 
93

Net interest income - FTE 1
1,945

 
1,255

 
409

 
240

 
(116
)
 
3,733

Provision/(benefit) for credit losses 2
201

 
120

 
133

 
(1
)
 
—

 
453

Net interest income after provision/(benefit) for credit losses
1,744

 
1,135

 
276

 
241

 
(116
)
 
3,280

Total noninterest income
1,105

 
795

 
328

 
179

 
(6
)
 
2,401

Total noninterest expense
2,088

 
1,085

 
1,248

 
58

 
(9
)
 
4,470

Income/(loss) before provision/(benefit) for income taxes
761

 
845

 
(644
)
 
362

 
(113
)
 
1,211

Provision/(benefit) for income taxes 3
280

 
275

 
(181
)
 
(83
)
 
(14
)
 
277

Net income/(loss) including income attributable to noncontrolling interest
481

 
570

 
(463
)
 
445

 
(99
)
 
934

Net income attributable to noncontrolling interest
—

 
—

 
—

 
16

 
—

 
16

Net income/(loss)

$481

 

$570

 

($463
)
 

$429

 

($99
)
 

$918


1 Presented on a matched maturity funds transfer price basis for the segments.
2 Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances.
3 Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.