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Business Segment Reporting
 3 Months Ended
Mar. 31, 2015
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 functional activities included 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.
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.
•
PWM 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. PWM 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 solutions, including advisory, capital raising, and financial risk management, with the first goal of best serving the needs of both public and private companies in the Wholesale Banking segment and PWM 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, 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 projects through STCC, with particular 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. It also 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 are reflected in the Corporate Other segment for the three months ended March 31, 2014. Prior to the sale of RidgeWorth in the second quarter of 2014, RidgeWorth's financial performance was reported in the Wholesale Banking segment.
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. Business segment reporting conventions are described below.
•
Net interest income – Net interest income is presented on an FTE basis to make income from tax-exempt assets comparable to other taxable products. The segment results reflect maturity funds transfer pricing, which ascribes 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 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 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, residual expenses are also allocated to the segments. The recoveries for the majority of these costs are reported 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, number of PCs/Laptops, and net revenue). The recoveries for these allocations are reported 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, 2015
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$41,128

 

$67,732

 

$24,439

 

$43

 

($4
)
 

$133,338

Average consumer and commercial deposits
90,681

 
47,478

 
2,359

 
3

 
(45
)
 
140,476

Average total assets
47,133

 
81,227

 
27,936

 
28,943

 
4,026

 
189,265

Average total liabilities
91,336

 
53,559

 
2,615

 
18,661

 
(78
)
 
166,093

Average total equity
—

 
—

 
—

 
—

 
23,172

 
23,172

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$667

 

$428

 

$121

 

$27

 

($103
)
 

$1,140

FTE adjustment
—

 
34

 
—

 
1

 
—

 
35

Net interest income - FTE 1
667

 
462

 
121

 
28

 
(103
)
 
1,175

Provision/(benefit) for credit losses 2
70

 
(4
)
 
(10
)
 
—

 
(1
)
 
55

Net interest income after provision/(benefit) for credit losses - FTE
597

 
466

 
131

 
28

 
(102
)
 
1,120

Total noninterest income
363

 
311

 
132

 
16

 
(5
)
 
817

Total noninterest expense
720

 
407

 
177

 
(20
)
 
(4
)
 
1,280

Income before provision for income taxes - FTE
240

 
370

 
86

 
64

 
(103
)
 
657

Provision for income taxes - FTE 3
89

 
125

 
28

 
22

 
(38
)
 
226

Net income including income attributable to noncontrolling interest
151

 
245

 
58

 
42

 
(65
)
 
431

Net income attributable to noncontrolling interest
—

 
—

 
—

 
2

 
—

 
2

Net income

$151

 

$245

 

$58

 

$40

 

($65
)
 

$429

 
 
 
 
 
 
 
 
 
 
 
 


 
Three Months Ended March 31, 2014
(Dollars in millions)
Consumer
Banking and
Private Wealth
Management
 
Wholesale Banking
 
Mortgage Banking
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Average loans

$41,259

 

$58,936

 

$28,286

 

$51

 

($7
)
 

$128,525

Average consumer and commercial deposits
84,358

 
42,287

 
1,887

 
(64
)
 
(72
)
 
128,396

Average total assets
46,938

 
70,041

 
31,550

 
25,622

 
2,820

 
176,971

Average total liabilities
85,179

 
48,984

 
2,435

 
18,702

 
(56
)
 
155,244

Average total equity
—

 
—

 
—

 
—

 
21,727

 
21,727

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$644

 

$391

 

$134

 

$75

 

($40
)
 

$1,204

FTE adjustment
—

 
34

 
—

 
1

 
—

 
35

Net interest income - FTE 1
644

 
425

 
134

 
76

 
(40
)
 
1,239

Provision for credit losses 2
53

 
23

 
26

 
—

 
—

 
102

Net interest income after provision for credit losses - FTE
591

 
402

 
108

 
76

 
(40
)
 
1,137

Total noninterest income
361

 
275

 
100

 
59

 
(4
)
 
791

Total noninterest expense
707

 
418

 
186

 
50

 
(4
)
 
1,357

Income before provision for income taxes - FTE
245

 
259

 
22

 
85

 
(40
)
 
571

Provision for income taxes - FTE 3
90

 
83

 
6

 
1

 
(20
)
 
160

Net income including income attributable to noncontrolling interest
155

 
176

 
16

 
84

 
(20
)
 
411

Net income attributable to noncontrolling interest
—

 
—

 
—

 
6

 
—

 
6

Net income

$155

 

$176

 

$16

 

$78

 

($20
)
 

$405

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