NOTE 16 - BUSINESS SEGMENT REPORTING

The Company measures business activity across three segments: 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 three primary businesses: Consumer Banking, Consumer Lending, 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 and payments, loans, brokerage, and various fee-based services. Discount/online and full-service brokerage products are offered to individual clients through STIS. Consumer Banking also serves as an entry point for clients and provides services for other lines of business.

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Consumer Lending offers an array of lending products to consumers and small business clients via the Company's Consumer Banking and Private Wealth Management businesses, through online channels (www.suntrust.com and www.lightstream.com), as well as through various national offices and partnerships. Products offered include home equity lines, personal credit lines and loans, direct auto, indirect auto, student lending, credit cards, and other lending products.

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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 Institutional Investment Solutions 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:

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CIB delivers comprehensive capital markets solutions, including advisory, capital raising, and financial risk management, with the goal of 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, and technology, media and communications. 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).

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Commercial & Business Banking offers an array of traditional banking products, including lending, cash management and investment banking solutions via STRH to commercial clients (generally those with 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 provides corporate insurance premium financing solutions.

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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. 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.

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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 also services loans for itself and for other investors.

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.

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.

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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 matched 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 difference between funds credits and funds charges at the segment level resides in Reconciling Items. The change in this variance is generally attributable to corporate balance sheet management strategies.


•	Provision/(benefit) for credit losses – Represents net charge-offs by segment combined with an allocation to the segments of the provision/(benefit) attributable to each segment's quarterly change in the ALLL and unfunded commitments reserve balances.

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Provision 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 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 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, 2016
(Dollars in millions)	Consumer Banking and Private Wealth Management		Wholesale Banking		Mortgage Banking			Corporate Other			Reconciling Items			Consolidated
Balance Sheets:
Average loans		$41,597		$70,757		$25,946			$72			$—			$138,372
Average consumer and commercial deposits	93,314		53,567		2,311			85			(48		)	149,229
Average total assets	47,268		84,375		29,203			30,564			1,604			193,014
Average total liabilities	93,933		59,439		2,686			13,178			(19		)	169,217
Average total equity	—		—		—			—			23,797			23,797
Statements of Income:
Net interest income		$700		$457		$112			$30			($17	)		$1,282
FTE adjustment	—		35		—			1			—			36
Net interest income - FTE ¹	700		492		112			31			(17		)	1,318
Provision/(benefit) for credit losses ²	29		82		(10		)	—			—			101
Net interest income after provision/(benefit) for credit losses - FTE	671		410		122			31			(17		)	1,217
Total noninterest income	355		285		124			22			(5		)	781
Total noninterest expense	748		407		175			(6		)	(6		)	1,318
Income before provision for income taxes - FTE	278		288		71			59			(16		)	680
Provision for income taxes - FTE ³	104		91		26			18			(8		)	231
Net income including income attributable to noncontrolling interest	174		197		45			41			(8		)	449
Net income attributable to noncontrolling interest	—		—		—			2			—			2
Net income		$174		$197		$45			$39			($8	)		$447



	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		$41,127		$67,733			$24,439			$43			($4	)		$133,338
Average consumer and commercial deposits	90,507		47,565			2,359			90			(45		)	140,476
Average total assets	47,129		81,160			27,936			29,013			4,027			189,265
Average total liabilities	91,158		53,685			2,615			18,713			(78		)	166,093
Average total equity	—		—			—			—			23,172			23,172
Statements of Income:
Net interest income		$666		$430			$121			$29			($106	)		$1,140
FTE adjustment	—		34			—			1			—			35
Net interest income - FTE ¹	666		464			121			30			(106		)	1,175
Provision/(benefit) for credit losses ²	70		(4		)	(10		)	—			(1		)	55
Net interest income after provision/(benefit) for credit losses - FTE	596		468			131			30			(105		)	1,120
Total noninterest income	363		285			132			42			(5		)	817
Total noninterest expense	730		397			178			(19		)	(6		)	1,280
Income before provision for income taxes - FTE	229		356			85			91			(104		)	657
Provision for income taxes - FTE ³	85		120			30			31			(40		)	226
Net income including income attributable to noncontrolling interest	144		236			55			60			(64		)	431
Net income attributable to noncontrolling interest	—		—			—			2			—			2
Net income		$144		$236			$55			$58			($64	)		$429

¹Presented on a matched maturity funds transfer price basis for the segments.

²Provision/(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.

³Includes regular income tax provision and taxable-equivalent income adjustment reversal.