SunTrust 2011 Annual Report Download - page 143
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Notes to Consolidated Financial Statements (Continued)
127
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 at December 31 is summarized in the table below:
(Dollars in millions)
Balance at beginning of period
Allowance recorded upon VIE consolidation
Provision for loan losses
(Benefit)/provision for unfunded commitments1
Loan charge-offs
Loan recoveries
Balance at end of period
Components:
ALLL
Unfunded commitments reserve2
Allowance for credit losses
2011
$3,032
—
1,523
(10)
(2,241)
201
$2,505
$2,457
48
$2,505
2010
$3,235
1
2,708
(57)
(3,018)
163
$3,032
$2,974
58
$3,032
2009
$2,379
—
4,007
87
(3,398)
160
$3,235
$3,120
115
$3,235
1 Beginning in the fourth quarter of 2009, the Company recognized the (benefit)/provision 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 (benefit)/provision for unfunded
commitments remains classified within other noninterest expense in the Consolidated Statements of Income/(Loss).
2 The unfunded commitments reserve is separately recognized in other liabilities in the Consolidated Balance Sheets.
Activity in the ALLL by segment at December 31 is presented in the tables below:
(Dollars in millions)
Balance at beginning of period
Provision for loan losses
Loan charge-offs
Loan recoveries
Balance at end of period
(Dollars in millions)
Balance at beginning of period
Allowance recorded upon VIE consolidation
Provision for loan losses
Loan charge-offs
Loan recoveries
Balance at end of period
2011
Commercial
$1,303
324
(803)
140
$964
2010
Commercial
$1,353
—
938
(1,087)
99
$1,303
Residential
$1,498
1,113
(1,275)
18
$1,354
Residential
$1,592
—
1,622
(1,736)
20
$1,498
Consumer
$173
86
(163)
43
$139
Consumer
$175
1
148
(195)
44
$173
Total
$2,974
1,523
(2,241)
201
$2,457
Total
$3,120
1
2,708
(3,018)
163
$2,974
As further discussed in Note 1, “Significant Accounting Policies,” the ALLL is composed of both 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.