SunTrust 2011 Annual Report Download - page 58
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refreshed credit bureau scores, which are highly sensitive to first lien mortgage delinquency, of borrowers with junior liens.
At December 31, 2011, our home equity junior lien loss severity was approximately 90%.
The loan types comprising our consumer loan segment include guaranteed student loans, other direct, consisting primarily of
private student loans, indirect, consisting of loans secured by automobiles or recreational vehicles, and credit cards.
The composition of the Company's loan portfolio at December 31 is shown in the following tables:
Loan Portfolio by Types of Loans (Post-Adoption)
(Dollars in millions)
Commercial loans:
Commercial & industrial
Commercial real estate
Commercial construction
Total commercial loans
Residential loans:
Residential mortgages - guaranteed
Residential mortgages - nonguaranteed1
Home equity products
Residential construction
Total residential loans
Consumer loans:
Guaranteed student loans
Other direct
Indirect
Credit cards
Total consumer loans
LHFI
LHFS
2011
$49,538
5,094
1,240
55,872
6,672
23,243
15,765
980
46,660
7,199
2,059
10,165
540
19,963
$122,495
$2,353
2010
$44,753
6,167
2,568
53,488
4,520
23,959
16,751
1,291
46,521
4,260
1,722
9,499
485
15,966
$115,975
$3,501
Table 5
2009
$44,008
6,694
4,984
55,686
949
25,847
17,783
1,909
46,488
2,786
1,484
6,665
566
11,501
$113,675
$4,670
1Includes $431 million, $488 million, and $437 million of loans carried at fair value at December 31, 2011, 2010, and 2009, respectively.
Loans Held for Investment
Our loan growth performance was strong, with LHFI increasing $6.5 billion, up 6% during the year ended December 31,
2011. Growth was driven by increases in the commercial and industrial and government-guaranteed student and guaranteed
residential mortgage loans. We continued to make progress in our loan portfolio diversification strategy, as we have been
successful both in growing targeted commercial and consumer areas, and in reducing our exposure to certain residential and
construction areas that we consider to be higher risk. Continuing to manage down our commercial and residential construction
portfolios has resulted in a combined $1.6 billion decline in these portfolios during the year ended December 31, 2011, and
a $7.8 billion decrease since the end of 2008. At the same time that we have been managing these and other higher risk balances
down, we have also been reducing our risk by increasing our government-guaranteed loans. These efforts have driven a
meaningful improvement in our risk profile. Our strategy to purchase government-guaranteed loans has performed well as a
bridge during a time of low economic growth and, if organic loan growth continues in the coming quarters, we expect slower
growth in this category. Government-guaranteed loans increased this year by about $5.1 billion, and they now total $13.9
billion, or 11% of our loan portfolio.
Commercial loans increased $2.4 billion, up 4% during the year ended December 31, 2011. Growth was driven by a $4.8
billion increase in commercial and industrial loans, largely offset by decreases in commercial construction loans and
commercial real estate loans. Our larger corporate borrowers drove much of the 11% increase in commercial and industrial
loans. Growth came across most industry verticals, with healthcare and energy contributing the most. Meanwhile, commercial
construction loans decreased by $1.3 billion, down 52%, primarily as a result of our efforts to reduce risk levels by aggressively
managing existing construction exposure.
Residential loans remained relatively flat during the year ended December 31, 2011. Government-guaranteed mortgages grew
$2.2 billion, up 48%, as we added to this portfolio during the fourth quarter of 2011, and thereby continued to make progress
on diversifying and de-risking the overall balance sheet. We experienced declines across all other residential loan classes,