SunTrust 2010 Annual Report Download - page 60

activities. We expect that our costs will increase in 2011 as a result of the additional resources necessary to perform the
foreclosure process assessment, revise affidavit filings and make any other operational changes. This may result in higher
noninterest expense, including higher servicing costs and legal expenses, in our Mortgage line of business. In addition,
process changes required as a result of our assessment could increase our default servicing costs over the longer term.
Finally, the time to complete foreclosure sales temporarily may increase, and this may result in an increase in nonperforming
assets and servicing advances and may impact the collectability of such advances and the value of our mortgage servicing
rights asset. Accordingly, delays in foreclosure sales, including any delays beyond those currently anticipated, our process
enhancements, and any issues that may arise out of alleged irregularities in our foreclosure processes could increase the costs
associated with our mortgage operations.
Table 15 - Nonperforming Assets (Pre-Adoption)
As of December 31
(Dollars in millions) 2010 2009 2008 2007 2006
Nonperforming Assets
Nonaccrual/NPLs:
Commercial1$255 $484 $322 $75 $107
Real estate:
Construction loans 1,013 1,485 1,277 295 39
Residential mortgages21,988 2,716 1,847 841 266
Home equity lines 285 289 272 136 13
Commercial real estate 531 392 177 44 55
Consumer loans 38 37 45 39 24
Total nonaccrual/NPLs 4,110 5,403 3,940 1,430 504
OREO3596 620 500 184 55
Other repossessed assets 52 79 16 12 7
Total nonperforming assets $4,758 $6,102 $4,456 $1,626 $566
Accruing loans past due 90 days or more4$1,565 $1,500 $1,032 $611 $352
TDRs:
Accruing restructured loans 2,613 1,641 463 30 28
Nonaccruing restructured loans51,005 913 268 - -
Ratios:
NPLs to total loans 3.54 % 4.75 % 3.10 % 1.17 % 0.41 %
Nonperforming assets to total loans plus
OREO and other repossessed assets 4.08 5.33 3.49 1.33 0.47
1Includes $4 million, $12 million, and $31 million of loans carried at fair value at December 31, 2010, 2009, and 2008, respectively.
2Includes $24 million, $22 million, and $12 million of loans carried at fair value at December 31, 2010, 2009, and 2008 respectively.
3Does not include foreclosed real estate related to serviced loans insured by the FHA or the VA. Insurance proceeds due from the
FHA and the VA are recorded as a receivable in other assets until the funds are received and the property is conveyed.
4Includes $979 million, $494 million, $236 million, and $162 million of consolidated loans eligible for repurchase from GNMA and
classified as held for sale at December 31, 2009, 2008, 2007, and 2006, respectively.
5Nonaccruing restructured loans are included in total nonaccrual/NPLs.
Restructured Loans
In order to maximize the collection of loan balances, we evaluate troubled loans on a case-by-case basis to determine if a
loan modification would be appropriate. We pursue loan modifications when there is a reasonable chance that an appropriate
modification would allow our client to continue servicing the debt. For loans secured by residential real estate, if the client
demonstrates a loss of income such that the client cannot reasonably support even a modified loan, we may pursue short sales
and/or deed-in-lieu arrangements. For loans secured by income producing commercial properties, we perform a rigorous and
ongoing review that is programmatic in nature. We review a number of factors, including cash flows, loan structures,
collateral values, and guarantees, to identify loans within our income producing commercial loan portfolio that are most
likely to experience distress. Based on our review of these factors and our assessment of overall risk, we evaluate the benefits
of proactively initiating discussions with our clients to improve a loan’s risk profile. In some cases, we may renegotiate terms
of their loans so that they have a higher likelihood of continuing to perform. To date, we have restructured loans in a variety
of ways to help our clients service their debt and to mitigate the potential for additional losses. The primary restructuring
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