SunTrust 2004 Annual Report Download - page 84

82 SUNTRUST 2004 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
Total nonaccrual loans at December 31, 2004 and 2003 were
$354.2 and $336.5 million, respectively. The gross amounts of
interest income that would have been recorded in 2004, 2003, and
2002 on nonaccrual loans at December 31 of each year, if all such
loans had been accruing interest at their contractual rates, were
$21.6 million, $33.7 million, and $45.2 million, while interest
income actually recognized totaled $19.0 million, $14.1 million,
and $15.6 million, respectively.
At December 31, 2004 and 2003, impaired loans amounted to
$208.4 million and $229.7 million, respectively. Included in the
allowance for loan losses was $42.2 million and $41.3 million at
December 31, 2004 and 2003, respectively, related to impaired
loans. At December 31, 2004 and 2003, impaired loans requiring an
allowance for loan losses was $167.0 million and $174.2 million,
respectively. For the years ended December 31, 2004, 2003, and
2002, the average recorded investment in impaired loans was
$213.2 million, $359.6 million, and $424.6 million, respectively;
and $14.4 million, $10.0 million and $10.6 million, respectively, of
interest income was recognized on loans while they were impaired.
Securities with unrealized losses at December 31 were as follows:
2004
Less than twelve months Twelve months or longer Total
Fair Unrealized Fair Unrealized Fair Unrealized
(Dollars in thousands) Value Losses Value Losses Value Losses
U.S.Treasury and other U.S. government
agencies and corporations $ 1,731,338 $ 12,866 $ 10,008 $ 173 $ 1,741,346 $ 13,039
States and political subdivisions 126,990 1,082 2,772 44 129,762 1,126
Asset-backed securities 1,397,935 19,090 — — 1,397,935 19,090
Mortgage-backed securities 10,810,197 90,178 422,018 9,628 11,232,215 99,806
Corporate bonds 517,550 3,262 84,390 4,232 601,940 7,494
Total securities with unrealized losses $14,584,010 $126,478 $519,188 $14,077 $15,103,198 $140,555
Note 6 / LOANS
The composition of the Company’s loan portfolio at December 31 is shown in the following table:
(Dollars in thousands) 2004 2003
Commercial $ 31,823,812 $30,681,914
Real estate
Home equity 11,519,168 6,965,310
Construction 7,845,416 4,479,771
Residential mortgages 24,553,498 17,208,131
Other 12,083,747 9,330,114
Credit card 175,304 132,998
Consumer loans 13,425,227 11,934,083
Total loans $101,426,172 $80,732,321
Market changes in interest rates and market changes in credit
spreads will cause normal fluctuations in the market price of secu-
rities and the possibility of temporary unrealized losses.The major-
ity of the gross unrealized losses, $126.5 million out of total unre-
alized losses of $140.6 million, have been in an unrealized loss
position for less than 12 months. These securities were purchased
in 2004, and the temporary losses are due primarily to a rise in
market interest rates during 2004. The $14.1 million in unrealized
losses which have been in a loss position for more than 12 months
are primarily mortgage-backed securities issued by U.S. Govern-
ment agencies which were purchased in 2003. The reason for the
temporary loss is that market interest rates are higher than when
these securities were originally purchased. The Company reviews
all of its securities for impairment at least quarterly. As part of
these reviews, the Company determined that a particular asset-
backed security was impaired for other-than-temporary reasons
and recognized a security loss of $15.3 million in 2004. The
Company has determined that there were no additional other-
than-temporary impairments associated with the above securities
at December 31, 2004.