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Business Segment Reporting
 9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Business Segment Reporting
NOTE 16 - BUSINESS SEGMENT REPORTING
The Company measures business activity across two segments: Consumer and Wholesale, with functional activities included in Corporate Other. In the second quarter of 2017, the Company realigned its business segment structure from three segments to two segments based on, among other things, the manner in which financial information is evaluated by management and in conjunction with Company-wide organizational changes that were announced during the first quarter of 2017. Specifically, the Company retained the previous composition of the Wholesale Banking segment and changed the basis of presentation of the Consumer Banking and Private Wealth Management segment and Mortgage Banking segment such that those segments were combined into a single Consumer segment.
The following is a description of the segments and their primary businesses at September 30, 2017.

The Consumer segment is made up of four primary businesses:
•
Consumer Banking provides services to individual 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 by telephone (1-800-SUNTRUST). Financial products and services offered to consumers and small business clients include deposits and payments, loans, and various fee-based services. Consumer Banking also serves as an entry point for clients and provides services for other businesses.
•
Consumer Lending offers an array of lending products to individual consumers and small business clients via the Company's Consumer Banking and PWM businesses, through the internet (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.
•
PWM provides a full array of wealth management products and professional services to individual consumers and institutional clients, including loans, deposits, brokerage, professional investment advisory, 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. Investment advisory products and services are offered to clients by STAS, an SEC registered investment advisor. 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.
•
Mortgage Banking offers residential mortgage products nationally through its retail and correspondent channels, 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 other investors, in addition to loans held in the Company’s loan portfolio.

The Wholesale segment is made up of three primary businesses and the Treasury & Payment Solutions product group:
•
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 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).
•
Commercial & Business Banking offers an array of traditional banking products, including lending, cash management and investment banking solutions via STRH to commercial clients (generally clients with revenues between $1 million and $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 PAC, which provides corporate insurance premium financing solutions.
◦
In September 2017, the Company announced that it reached a definitive agreement to sell its PAC subsidiary. PAC had $1.3 billion in assets at September 30, 2017. The sale is expected to close in the fourth quarter of 2017, subject to various customary closing conditions.
•
Commercial Real Estate provides a full range of financial solutions for commercial real estate developers, owners, and operators, including construction, mini-perm, and permanent real estate financing, as well as tailored financing and equity investment solutions via STRH. With the acquisition of the assets of Pillar in December of 2016, commercial real estate also provides multi-family agency lending and servicing, as well as loan administration, advisory, and commercial mortgage brokerage services. The Institutional Property Group business targets relationships with REITs, pension fund advisors, private funds, homebuilders, and insurance companies and the Regional business focuses on private 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 Wholesale 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.

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, Corporate Other includes the Company's functional activities such as marketing, SunTrust online, human resources, finance, ER, legal and compliance, communications, procurement, enterprise information services, corporate real estate, and executive management.
Because business segment results are presented based on management accounting practices, the transition to the consolidated results prepared under U.S. GAAP creates certain differences, which are reflected in Reconciling Items. Business segment reporting conventions are described below:
•
Net interest income-FTE – is reconciled from net interest income and is grossed-up on an FTE basis to make income from tax-exempt assets comparable to other taxable products. Segment results reflect matched maturity funds transfer pricing, which ascribes credits or charges based on the economic value or cost created by assets and liabilities of each segment. Differences between these credits and charges are captured as 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 for the provision/(benefit) attributable to each segment's quarterly change in the ALLL and unfunded commitments reserve balances.
•
Noninterest income – includes federal and state tax credits that are grossed-up on a pre-tax equivalent basis, related primarily to certain community development investments.
•
Provision for income taxes-FTE – is calculated using a blended income tax rate for each segment and includes reversals of the tax adjustments and credits described above. The difference between the calculated provision for income taxes at the segment level and the consolidated provision for income taxes is reported as reconciling items.
The segment’s financial performance is comprised of direct financial results and allocations for various corporate functions that provide management an enhanced view of the segment’s financial performance. Internal allocations include the following:
•
Operational costs – expenses are charged to segments based on a methodical activity-based costing process, which also allocates residual expenses to the segments. Generally, recoveries 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 (number of equivalent employees, number of PCs/laptops, net revenue, etc.). Recoveries for these allocations are reported in Corporate Other.
The application and development of management reporting methodologies is an active process and undergoes 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. If significant changes to management reporting methodologies take place, the impact of these changes is quantified and prior period information is revised, when practicable.
In the second quarter of 2017, in conjunction with the aforementioned business segment structure realignment, the Company made certain adjustments to its internal funds transfer pricing methodology. Prior period information was revised to conform to the new business segment structure and the updated internal funds transfer pricing methodology.

 
Three Months Ended September 30, 2017
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average loans

$73,378

 

$71,255

 

$76

 

($3
)
 

$144,706

Average consumer and commercial deposits
103,066

 
56,211

 
202

 
(60
)
 
159,419

Average total assets
83,161

 
85,280

 
34,763

 
2,534

 
205,738

Average total liabilities
103,964

 
61,820

 
15,388

 
(7
)
 
181,165

Average total equity
—

 
—

 
—

 
24,573

 
24,573

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$941

 

$571

 

($23
)
 

($59
)
 

$1,430

FTE adjustment
—

 
36

 
1

 
—

 
37

Net interest income-FTE 1
941

 
607

 
(22
)
 
(59
)
 
1,467

Provision/(benefit) for credit losses 2
136

 
(16
)
 
—

 
—

 
120

Net interest income after provision/(benefit) for credit losses-FTE
805

 
623

 
(22
)
 
(59
)
 
1,347

Total noninterest income
473

 
406

 
19

 
(52
)
 
846

Total noninterest expense
899

 
459

 
39

 
(6
)
 
1,391

Income before provision for income taxes-FTE
379

 
570

 
(42
)
 
(105
)
 
802

Provision for income taxes-FTE 3
138

 
211

 
(22
)
 
(65
)
 
262

Net income including income attributable to noncontrolling interest
241

 
359

 
(20
)
 
(40
)
 
540

Net income attributable to noncontrolling interest
—

 
—

 
2

 
—

 
2

Net income

$241

 

$359

 

($22
)
 

($40
)
 

$538


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 for the provision/(benefit) attributable to quarterly changes in the ALLL and unfunded commitment reserve balances.
3 Includes regular provision for income taxes as well as FTE income and tax credit adjustment reversals.

 
 Three Months Ended September 30, 2016 1
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average loans

$70,560

 

$71,625

 

$74

 

($2
)
 

$142,257

Average consumer and commercial deposits
99,730

 
55,489

 
157

 
(63
)
 
155,313

Average total assets
80,298

 
85,762

 
32,479

 
2,937

 
201,476

Average total liabilities
100,698

 
61,078

 
15,351

 
(61
)
 
177,066

Average total equity
—

 
—

 
—

 
24,410

 
24,410

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$872

 

$505

 

$23

 

($92
)
 

$1,308

FTE adjustment
—

 
34

 
1

 
(1
)
 
34

Net interest income-FTE 2
872

 
539

 
24

 
(93
)
 
1,342

Provision for credit losses 3
29

 
68

 
—

 
—

 
97

Net interest income after provision for credit losses-FTE
843

 
471

 
24

 
(93
)
 
1,245

Total noninterest income
555

 
355

 
20

 
(41
)
 
889

Total noninterest expense
985

 
424

 
4

 
(4
)
 
1,409

Income before provision for income taxes-FTE
413

 
402

 
40

 
(130
)
 
725

Provision for income taxes-FTE 4
155

 
150

 
12

 
(68
)
 
249

Net income including income attributable to noncontrolling interest
258

 
252

 
28

 
(62
)
 
476

Net income attributable to noncontrolling interest
—

 
—

 
2

 
—

 
2

Net income

$258

 

$252

 

$26

 

($62
)
 

$474

1 Beginning in the second quarter of 2017, the Company realigned its business segment structure from three segments to two segments. Specifically, the Company retained the previous composition of the Wholesale Banking segment and changed the basis of presentation of the Consumer Banking and Private Wealth Management segment and Mortgage Banking segment such that those segments were combined into a single Consumer segment. Accordingly, business segment information presented for the three months ended September 30, 2016 has been revised to conform to the new business segment structure and updated internal funds transfer pricing methodology for consistent presentation.
2 Presented on a matched maturity funds transfer price basis for the segments.
3 Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the ALLL and unfunded commitment reserve balances.
4 Includes regular provision for income taxes as well as FTE income and tax credit adjustment reversals.

 
Nine Months Ended September 30, 2017
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average loans

$72,200

 

$72,005

 

$74

 

($3
)
 

$144,276

Average consumer and commercial deposits
102,686

 
56,326

 
162

 
(29
)
 
159,145

Average total assets
82,071

 
85,638

 
34,420

 
2,704

 
204,833

Average total liabilities
103,616

 
61,990

 
15,089

 
7

 
180,702

Average total equity
—

 
—

 
—

 
24,131

 
24,131

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$2,748

 

$1,670

 

($17
)
 

($202
)
 

$4,199

FTE adjustment
—

 
105

 
2

 
—

 
107

Net interest income-FTE 1
2,748

 
1,775

 
(15
)
 
(202
)
 
4,306

Provision for credit losses 2
299

 
31

 
—

 
—

 
330

Net interest income after provision for credit losses-FTE
2,449

 
1,744

 
(15
)
 
(202
)
 
3,976

Total noninterest income
1,401

 
1,194

 
59

 
(134
)
 
2,520

Total noninterest expense
2,832

 
1,399

 
26

 
(14
)
 
4,243

Income before provision for income taxes-FTE
1,018

 
1,539

 
18

 
(322
)
 
2,253

Provision for income taxes-FTE 3
367

 
572

 
(26
)
 
(200
)
 
713

Net income including income attributable to noncontrolling interest
651

 
967

 
44

 
(122
)
 
1,540

Net income attributable to noncontrolling interest
—

 
—

 
7

 
—

 
7

Net income

$651

 

$967

 

$37

 

($122
)
 

$1,533


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 for the provision attributable to quarterly changes in the ALLL and unfunded commitment reserve balances.
3 Includes regular provision for income taxes as well as FTE income and tax credit adjustment reversals.

 
 Nine Months Ended September 30, 2016 1
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average loans

$69,075

 

$71,489

 

$66

 

($2
)
 

$140,628

Average consumer and commercial deposits
98,751

 
54,099

 
122

 
(61
)
 
152,911

Average total assets
78,378

 
85,392

 
31,510

 
2,333

 
197,613

Average total liabilities
99,746

 
59,798

 
14,019

 
(26
)
 
173,537

Average total equity
—

 
—

 
—

 
24,076

 
24,076

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$2,578

 

$1,488

 

$83

 

($272
)
 

$3,877

FTE adjustment
—

 
103

 
2

 
—

 
105

Net interest income-FTE 2
2,578

 
1,591

 
85

 
(272
)
 
3,982

Provision for credit losses 3
90

 
253

 
—

 
—

 
343

Net interest income after provision for credit losses-FTE
2,488

 
1,338

 
85

 
(272
)
 
3,639

Total noninterest income
1,568

 
996

 
112

 
(107
)
 
2,569

Total noninterest expense
2,839

 
1,243

 
3

 
(13
)
 
4,072

Income before provision for income taxes-FTE
1,217

 
1,091

 
194

 
(366
)
 
2,136

Provision for income taxes-FTE 4
455

 
407

 
54

 
(200
)
 
716

Net income including income attributable to noncontrolling interest
762

 
684

 
140

 
(166
)
 
1,420

Net income attributable to noncontrolling interest
—

 
—

 
7

 
—

 
7

Net income

$762

 

$684

 

$133

 

($166
)
 

$1,413


1 Beginning in the second quarter of 2017, the Company realigned its business segment structure from three segments to two segments. Specifically, the Company retained the previous composition of the Wholesale Banking segment and changed the basis of presentation of the Consumer Banking and Private Wealth Management segment and Mortgage Banking segment such that those segments were combined into a single Consumer segment. Accordingly, business segment information presented for the nine months ended September 30, 2016 has been revised to conform to the new business segment structure and updated internal funds transfer pricing methodology for consistent presentation.
2 Presented on a matched maturity funds transfer price basis for the segments.
3 Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the ALLL and unfunded commitment reserve balances.
4 Includes regular provision for income taxes as well as FTE income and tax credit adjustment reversals.