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Business Segment Reporting
 12 Months Ended
Dec. 31, 2017
Segment Reporting [Abstract]  
Business Segment Reporting
NOTE 20 - BUSINESS SEGMENT REPORTING
The Company operates and 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 December 31, 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 GFO, 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, GFO helps clients 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, technology, financial services, healthcare, industrials, and 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 $250 million), not-for-profit organizations, and governmental entities, as well as auto dealer financing (floor plan inventory financing).
◦
On December 1, 2017, the Company completed the sale of PAC, its commercial lines insurance premium finance subsidiary. For all periods presented, the financial results of PAC, including the gain on the sale, are reflected in the Wholesale segment. See Note 2, "Acquisitions/Dispositions," for additional information related to the sale of PAC.
•
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. Commercial Real Estate also provides multi-family agency lending and servicing, as well as loan administration, advisory, and commercial mortgage brokerage services via Pillar. 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 for credit losses – represents net charge-offs by segment combined with an allocation to the segments for the provision 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.



 
Year Ended December 31, 2017
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average LHFI

$72,622

 

$71,521

 

$76

 

($3
)
 

$144,216

Average consumer and commercial deposits
102,820

 
56,618

 
175

 
(64
)
 
159,549

Average total assets
82,507

 
85,227

 
34,567

 
2,630

 
204,931

Average total liabilities
103,757

 
62,291

 
14,610

 
(28
)
 
180,630

Average total equity
—

 
—

 
—

 
24,301

 
24,301

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$3,698

 

$2,247

 

($44
)
 

($268
)
 

$5,633

FTE adjustment
—

 
142

 
3

 
—

 
145

Net interest income-FTE 1
3,698

 
2,389

 
(41
)
 
(268
)
 
5,778

Provision for credit losses 2
368

 
41

 
—

 
—

 
409

Net interest income after provision for credit losses-FTE
3,330

 
2,348

 
(41
)
 
(268
)
 
5,369

Total noninterest income
1,874

 
1,710

 
(33
)
 
(197
)
 
3,354

Total noninterest expense
3,842

 
1,869

 
73

 
(20
)
 
5,764

Income before provision for income taxes-FTE
1,362

 
2,189

 
(147
)
 
(445
)
 
2,959

Provision for income taxes-FTE 3, 4
491

 
816

 
(355
)
 
(275
)
 
677

Net income including income attributable to noncontrolling interest
871

 
1,373

 
208

 
(170
)
 
2,282

Less: Net income attributable to noncontrolling interest
—

 
—

 
9

 
—

 
9

Net income

$871

 

$1,373

 

$199

 

($170
)
 

$2,273


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.
4 Tax effects resulting from the 2017 Tax Act are included in Corporate Other.

 
Year Ended December 31, 2016 1
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average LHFI

$69,455

 

$71,600

 

$66

 

($3
)
 

$141,118

Average consumer and commercial deposits
99,424

 
54,713

 
124

 
(72
)
 
154,189

Average total assets
79,118

 
85,494

 
31,952

 
2,440

 
199,004

Average total liabilities
100,423

 
60,438

 
14,148

 
(73
)
 
174,936

Average total equity
—

 
—

 
—

 
24,068

 
24,068

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$3,465

 

$2,018

 

$101

 

($363
)
 

$5,221

FTE adjustment
—

 
136

 
2

 
—

 
138

Net interest income-FTE 2
3,465

 
2,154

 
103

 
(363
)
 
5,359

Provision for credit losses 3
172

 
272

 
—

 
—

 
444

Net interest income after provision for credit losses-FTE
3,293

 
1,882

 
103

 
(363
)
 
4,915

Total noninterest income
2,036

 
1,356

 
138

 
(147
)
 
3,383

Total noninterest expense
3,796

 
1,676

 
13

 
(17
)
 
5,468

Income before provision for income taxes-FTE
1,533

 
1,562

 
228

 
(493
)
 
2,830

Provision for income taxes-FTE 4
568

 
583

 
59

 
(267
)
 
943

Net income including income attributable to noncontrolling interest
965

 
979

 
169

 
(226
)
 
1,887

Less: Net income attributable to noncontrolling interest
—

 
—

 
9

 
—

 
9

Net income

$965

 

$979

 

$160

 

($226
)
 

$1,878


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 year ended December 31, 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.

 
Year Ended December 31, 2015 1
(Dollars in millions)
Consumer
 
Wholesale
 
Corporate Other
 
Reconciling
Items
 
Consolidated
Balance Sheets:
 
 
 
 
 
 
 
 
 
Average LHFI

$65,637

 

$67,872

 

$60

 

($11
)
 

$133,558

Average consumer and commercial deposits
93,789

 
50,373

 
101

 
(60
)
 
144,203

Average total assets
75,204

 
80,903

 
29,668

 
3,117

 
188,892

Average total liabilities
94,801

 
56,044

 
14,771

 
(70
)
 
165,546

Average total equity
—

 
—

 
—

 
23,346

 
23,346

Statements of Income:
 
 
 
 
 
 
 
 
 
Net interest income

$3,324

 

$1,918

 

$152

 

($630
)
 

$4,764

FTE adjustment
1

 
138

 
3

 
—

 
142

Net interest income-FTE 2
3,325

 
2,056

 
155

 
(630
)
 
4,906

Provision for credit losses 3
27

 
137

 
—

 
1

 
165

Net interest income after provision for credit losses-FTE
3,298

 
1,919

 
155

 
(631
)
 
4,741

Total noninterest income
1,967

 
1,285

 
137

 
(121
)
 
3,268

Total noninterest expense
3,631

 
1,523

 
17

 
(11
)
 
5,160

Income before provision for income taxes-FTE
1,634

 
1,681

 
275

 
(741
)
 
2,849

Provision for income taxes-FTE 4
553

 
628

 
81

 
(356
)
 
906

Net income including income attributable to noncontrolling interest
1,081

 
1,053

 
194

 
(385
)
 
1,943

Less: Net income attributable to noncontrolling interest
—

 
—

 
10

 
—

 
10

Net income

$1,081

 

$1,053

 

$184

 

($385
)
 

$1,933

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 year ended December 31, 2015 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.