SunTrust 2010 Annual Report Download - page 131

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
For the years ended December 31, 2010, 2009, and 2008, interest income recognized on nonaccrual loans (excluding
consumer and mortgage, which are considered smaller balance pools of homogeneous loans) and accruing restructured loans
totaled $113 million, $64 million, and $23 million, respectively. Of the total interest income recognized, cash basis interest
income was $13 million, $12 million, and $11 million for the years ended December 31, 2010, 2009, and 2008, respectively.
At December 31, 2010, the Company had $15 million in commitments to lend additional funds to debtors owing receivables
whose terms have been modified in a TDR. At December 31, 2009, the Company had an insignificant amount of such
commitments.
Note 7 - Allowance for Credit Losses
The allowance for credit losses consists of the ALLL and the reserve for unfunded commitments. Activity in the allowance
for credit losses for the years ended December 31 is summarized in the table below:
For the Year Ended December 31,
(Dollars in millions) 2010 2009 2008
Balance at beginning of period $3,235 $2,379 $1,290
Allowance recorded upon VIE consolidation 1--
Allowance recorded upon GB&T acquisition -- 159
Provision for loan losses 2,708 4,007 2,474
Provision/(benefit) for unfunded commitments1(57) 87 20
Loan charge-offs (3,018) (3,398) (1,680)
Loan recoveries 163 160 116
Balance at end of period $3,032 $3,235 $2,379
Components:
ALLL $2,974 $3,120 $2,351
Unfunded commitments reserve258 115 28
Allowance for credit losses $3,032 $3,235 $2,379
1Beginning in the fourth quarter of 2009, the Company recorded the provision/(benefit) for unfunded commitments within the provision for
credit losses in the Consolidated Statements of Income/(Loss). Considering the immateriality of this provision prior to the fourth quarter of
2009, the provision/(benefit) for unfunded commitments remains classified within other noninterest expense in the Consolidated Statements
of Income/(Loss).
2The unfunded commitments reserve is separately recorded in other liabilities in the Consolidated Balance Sheets.
As further discussed in Note 1, “Significant Accounting Policies,” the ALLL is composed of specific allowances for certain
nonaccrual loans and TDRs and general allowances grouped into loan pools based on similar characteristics. No allowance is
required for loans carried at fair value. Additionally, the Company does not record an allowance for loan products that are
guaranteed by government agencies, as there is nominal risk of principal loss. The Company’s LHFI portfolio and related
ALLL at December 31, 2010 and December 31, 2009, respectively, is shown in the tables below:
As of December 31, 2010
Commercial Residential Consumer Total
(Dollars in millions)
Carrying
Value
Associated
ALLL
Carrying
Value
Associated
ALLL
Carrying
Value
Associated
ALLL
Carrying
Value
Associated
ALLL
LHFI individually evaluated for
impairment $906 $175 $3,166 $428 $11 $2 $4,083 $605
LHFI collectively evaluated for
impairment 52,578 1,128 42,867 1,070 15,955 171 111,400 2,369
Total LHFI evaluated for
impairment 53,484 1,303 46,033 1,498 15,966 173 115,483 2,974
LHFI at fair value 4 - 488 - - - 492 -
Total LHFI $53,488 $1,303 $46,521 $1,498 $15,966 $173 $115,975 $2,974
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