Note 15 - Business Segment Reporting

The Company has six business segments used to measure business activities: Retail Banking, Diversified Commercial Banking, CRE, CIB, Mortgage, and W&IM with the remainder in Corporate Other and Treasury. The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. For a further discussion concerning SunTrust’s business segments, see Note 22, “Business Segment Reporting”, to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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 in the tables below.

For business segment reporting purposes, the basis of presentation in the accompanying discussion includes the following:

—

Net interest income – All net interest income is presented on a FTE basis. The revenue gross-up has been applied to tax-exempt loans and investments to make them 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 the matched maturity funds mismatch is generally attributable to the corporate balance sheet management strategies.

—

Provision for credit losses - Represents net charge-offs by segment. The difference between the segment net charge-offs and the consolidated provision for credit losses is reported in Reconciling Items.

—

Provision/(benefit) for income taxes - Calculated using a nominal 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 business 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:

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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 the Corporate Other and Treasury segment.

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Support and Overhead Costs – Expenses not directly attributable to a specific segment are allocated based on various drivers (e.g., number of full-time equivalent employees and volume of loans and deposits). The recoveries for these allocations are in Corporate Other and Treasury.

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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 June 30, 2011
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE		CIB		Mortgage		W&IM		Corporate Other and Treasury		Reconciling Items		Consolidated
Average total assets		$40,458		$24,771		$8,262		$23,120		$33,363		$8,640		$31,530		$383		$170,527
Average total liabilities		78,081		21,113		1,541		18,240		3,427		12,839		15,764		13		151,018
Average total equity		-		-		-		-		-		-		-		19,509		19,509

Net interest income		$632		$148		$36		$120		$116		$102		$137		($32)		$1,259
FTE adjustment		-		25		-		1		-		-		2		(1)		27

Net interest income (FTE)¹		632		173		36		121		116		102		139		(33)		1,286
Provision for credit losses²		197		30		112		3		153		11		(1)		(113)		392

Net interest income/(loss) after provision for credit losses		435		143		(76)		118		(37)		91		140		80		894

Noninterest income		280		65		22		193		75		208		74		(5)		912
Noninterest expense		653		120		109		148		277		241		-		(6)		1,542

Income/(loss) before provision/(benefit) for income taxes		62		88		(163)		163		(239)		58		214		81		264
Provision/(benefit) for income taxes³		23		32		(81)		60		(92)		22		88		33		85

Net income/(loss) including income attributable to noncontrolling interest		39		56		(82)		103		(147)		36		126		48		179
Net income attributable to noncontrolling interest		-		-		-		-		-		(1)		2		-		1

Net income/(loss)		$39		$56		($82)		$103		($147)		$37		$124		$48		$178


	Three Months Ended June 30, 2010
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE		CIB		Mortgage		W&IM		Corporate Other and Treasury		Reconciling Items		Consolidated
Average total assets		$38,548		$24,753		$11,255		$19,557		$34,624		$9,157		$31,632		$1,747		$171,273
Average total liabilities		75,779		20,470		1,707		15,831		3,594		11,728		19,590		261		148,960
Average total equity		-		-		-		-		-		-		-		22,313		22,313

Net interest income		$629		$133		$43		$93		$106		$95		$113		($34)		$1,178
FTE adjustment		-		27		-		-		-		-		3		-		30

Net interest income (FTE)¹		629		160		43		93		106		95		116		(34)		1,208
Provision for credit losses²		251		41		118		7		289		16		-		(60)		662

Net interest income/(loss) after provision for credit losses		378		119		(75)		86		(183)		79		116		26		546

Noninterest income		302		57		19		142		77		197		161		(3)		952
Noninterest expense		620		112		114		122		261		219		58		(3)		1,503

Income/(loss) before provision/(benefit) for income taxes		60		64		(170)		106		(367)		57		219		26		(5)
Provision/(benefit) for income taxes³		21		24		(84)		39		(139)		21		83		15		(20)

Net income/(loss) including income attributable to noncontrolling interest		39		40		(86)		67		(228)		36		136		11		15
Net income attributable to noncontrolling interest		-		-		-		-		-		-		2		1		3

Net income/(loss)		$39		$40		($86)		$67		($228)		$36		$134		$10		$12

¹	Net interest income is FTE and is presented on a matched maturity funds transfer price basis for the line of business.

²	Provision for credit losses represents net charge-offs for the segments.

³	Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.


	Six Months Ended June 30, 2011
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE		CIB		Mortgage		W&IM		Corporate Other and Treasury		Reconciling Items		Consolidated
Average total assets		$40,595		$24,714		$8,580		$22,288		$33,947		$8,678		$31,328		$1,659		$171,789
Average total liabilities		77,357		21,227		1,507		17,928		3,559		12,918		16,017		(22)		150,491
Average total equity		-		-		-		-		-		-		-		21,298		21,298

Net interest income		$1,258		$294		$71		$237		$241		$204		$274		($71)		$2,508
FTE adjustment		-		50		1		1		-		-		3		-		55

Net interest income (FTE)¹		1,258		344		72		238		241		204		277		(71)		2,563
Provision for credit losses²		413		38		219		3		376		28		(1)		(237)		839

Net interest income/(loss) after provision for credit losses		845		306		(147)		235		(135)		176		278		166		1,724
Noninterest income		544		122		48		370		156		423		151		(19)		1,795
Noninterest expense		1,282		235		217		295		528		477		(9)		(18)		3,007

Income/(loss) before provision/(benefit) for income taxes		107		193		(316)		310		(507)		122		438		165		512
Provision/(benefit) for income taxes³		39		71		(157)		114		(195)		43		164		67		146

Net income/(loss) including income attributable to noncontrolling interest		68		122		(159)		196		(312)		79		274		98		366
Net income attributable to noncontrolling interest		-		-		-		-		-		4		5		(1)		8

Net income/(loss)		$68		$122		($159)		$196		($312)		$75		$269		$99		$358


	Six Months Ended June 30, 2010
(Dollars in millions)	Retail Banking		Diversified Commercial Banking		CRE		CIB		Mortgage		W&IM		Corporate Other and Treasury		Reconciling Items		Consolidated
Average total assets		$38,611		$24,945		$11,582		$19,212		$34,662		$9,112		$32,169		$1,058		$171,351
Average total liabilities		74,961		20,989		1,832		15,089		3,460		11,657		20,743		294		149,025
Average total equity		-		-		-		-		-		-		-		22,326		22,326

Net interest income		$1,239		$262		$85		$177		$208		$187		$233		($41)		$2,350
FTE adjustment		-		54		-		1		-		-		6		(1)		60

Net interest income (FTE)¹		1,239		316		85		178		208		187		239		(42)		2,410
Provision for credit losses²		535		64		188		36		691		29		-		(19)		1,524

Net interest income/(loss) after provision for credit losses		704		252		(103)		142		(483)		158		239		(23)		886
Noninterest income		578		109		40		255		125		382		168		(7)		1,650
Noninterest expense		1,226		228		203		232		514		441		28		(8)		2,864

Income/(loss) before provision/(benefit) for income taxes		56		133		(266)		165		(872)		99		379		(22)		(328)
Provision/(benefit) for income taxes³		19		48		(139)		61		(331)		37		126		(5)		(184)

Net income/(loss) including income attributable to noncontrolling interest		37		85		(127)		104		(541)		62		253		(17)		(144)
Net income attributable to noncontrolling interest		-		-		-		-		-		-		5		-		5

Net income/(loss)		$37		$85		($127)		$104		($541)		$62		$248		($17)		($149)

¹	Net interest income is FTE and is presented on a matched maturity funds transfer price basis for the line of business.

²	Provision for credit losses represents net charge-offs for the segments.

³	Includes regular income tax provision/(benefit) and taxable-equivalent income adjustment reversal.