SunTrust 2006 Annual Report Download - page 45

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When a loan is placed on nonaccrual, unpaid interest is reversed against interest income. Interest income
on nonaccrual loans, if recognized, is either recorded using the cash basis method of accounting or
recognized at the end of the loan after the principal has been reduced to zero, depending on the type of
loan. If and when a nonaccrual loan is returned to accruing status, the accrued interest at the date the
loan is placed on nonaccrual status, and foregone interest during the nonaccrual period, are recorded as
interest income only after all principal has been collected for commercial loans. For consumer loans and
residential mortgage loans, the accrued interest at the date the loan is placed on nonaccrual status, and
foregone interest during the nonaccrual period, are recorded as interest income as of the date the loan no
longer meets the 90 and 120 days past due criteria, respectively. During the years ended December 31,
2006 and 2005 cash basis interest income for nonaccrual loans amounted to $16.6 million and $13.2
million, respectively. For the years ended December 31, 2006 and 2005, estimated interest income of
$41.6 million and $28.3 million, respectively, would have been recorded if all such loans had been
accruing interest according to their original contractual terms.
Accruing loans past due ninety days or more decreased $20.0 million from December 31, 2005 to
$351.5 million as of December 31, 2006. The decrease was primarily driven by sales of delinquent but
accruing student loans in 2006.
TABLE 10 - Securities Available for Sale
As of December 31
(Dollars in millions)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
U.S. Treasury and other U.S. government
agencies and corporations
2006 $1,608.0 $8.6 $16.1 $1,600.5
2005 2,593.8 0.6 47.4 2,547.0
2004 2,543.9 7.2 13.0 2,538.1
States and political subdivisions
2006 $1,032.3 $13.4 $4.6 $1,041.1
2005 914.1 15.5 3.9 925.7
2004 841.6 25.1 1.1 865.6
Asset-backed securities
2006 $1,128.0 $1.9 $17.6 $1,112.3
2005 1,630.8 8.2 26.3 1,612.7
2004 2,590.0 7.6 19.1 2,578.5
Mortgage-backed securities
2006 $17,337.3 $37.4 $243.8 $17,130.9
2005 17,354.5 11.6 343.5 17,022.6
2004 18,367.0 58.2 99.9 18,325.3
Corporate bonds
2006 $468.9 $1.5 $7.6 $462.8
2005 1,090.6 2.6 22.8 1,070.4
2004 1,667.1 19.7 7.5 1,679.3
Other securities1
2006 $1,423.9 $2,330.2 - $3,754.1
2005 1,370.0 1,977.4 - 3,347.4
2004 921.3 2,032.9 - 2,954.2
Total securities available for sale
2006 $22,998.4 $2,393.0 $289.7 $25,101.7
2005 24,953.8 2,015.9 443.9 26,525.8
2004 26,930.9 2,150.7 140.6 28,941.0
1Includes the Company’s investment in 48.2 million shares of common stock of The Coca-Cola Company.
Securities Available for Sale
The investment portfolio is managed as part of the overall asset and liability management process to
optimize income and market performance over an entire interest rate cycle while mitigating risk. The
Company managed the portfolio in 2006 with the goal of continuing to improve yield while reducing the
size to partially fund loan growth and reduce the Company’s use of wholesale funding. Consistent with
this goal, the Company restructured a portion of the investment portfolio during the latter half of 2006.
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