SunTrust 2008 Annual Report Download - page 169

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
market value of the underlying investment and therefore, can be impacted by changes in the performances of the underlying
obligor or collateral as well as general market conditions. The total loss recognized as of December 31, 2008 was
approximately $177.7 million, which is comprised of losses on probable future purchases, losses on ARS classified as trading
securities that were purchased from investors through December 31, 2008 and estimated fines levied against STRH and STIS
by various federal and state agencies. This loss is classified in trading account profits/(losses) and commissions on the
Consolidated Statement of Income. Due to the pass-through nature of these security purchases, the economic loss has been
included in the Corporate Other and Treasury segment.
Note 22 - Business Segment Reporting
The Company has four business segments used to measure business activities: Retail and Commercial, Wholesale, Wealth
and Investment Management, and Mortgage with the remainder in Corporate Other and Treasury.
Retail and Commercial serves consumers, businesses with up to $100 million in annual revenue, government/not-for-profit
enterprises, and provides services for the clients of the Company’s other businesses. Clients are serviced through an
extensive network of traditional and in-store branches, ATMs, the Internet and the telephone.
Wholesale’s primary businesses include Middle Market, which serves commercial clients with $100 million to $750 million
in annual revenue, Corporate Banking, which serves clients with greater than $750 million in annual revenue, Commercial
Real Estate, which serves commercial and residential developers and investors, and SunTrust Robinson Humphrey, which
offers capital market products and services to its clients.
Mortgage offers residential mortgage products nationally through its retail, broker, and correspondent channels. These
products are either sold in the secondary market, primarily with servicing rights retained, or held as whole loans in the
Company’s residential loan portfolio. The line of business services loans for its own residential mortgage portfolio as well as
for others. Additionally, the line of business generates revenue through its tax service subsidiary (ValuTree Real Estate
Services, LLC) and the Company’s captive reinsurance subsidiary (Twin Rivers Insurance Company).
Wealth and Investment Management provides a full array of wealth management products and professional services to both
individual and institutional clients. Wealth and Investment Management’s primary businesses include Private Wealth
Management (“PWM”) (brokerage and individual wealth management), GenSpring Family Offices LLC, Institutional
Investment Solutions, and RidgeWorth Capital Management.
In addition, the Company reports Corporate Other and Treasury, which includes the 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. Other components include Enterprise Information Services, which is the primary data processing and
operations group, the Corporate Real Estate group, Marketing, SunTrust Online, Human Resources, Finance, Corporate Risk
Management, Legal and Compliance, Branch Operations, Corporate Strategies, Procurement, and Executive Management.
Finally, Corporate Other and Treasury also includes Trustee Management, which provides treasury management and deposit
services to bankruptcy trustees.
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.
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 fully taxable-equivalent 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 loan losses - Represents net charge-offs by segment. The difference between the total segment net
charge-offs and the consolidated provision for loan losses is reported in Reconciling Items.
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