SunTrust 2014 Annual Report Download

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Annual
Report

Table of contents

  • Page 1
    Annual Report

  • Page 2
    ... Sets Our Path SunTrust Corporate Profile A Message to Our Shareholders Our Accomplishments Financial Highlights The Way Forward Together, We're Stronger Helping Our Clients Shine Helping Our Communities Shine Helping Our Teammates Shine Board of Directors Executive Leadership Team 1 2 3 4 5 6 9 10...

  • Page 3
    ..., one of SunTrust's predecessor banks, subscribed to the following philosophy: If you build your community, you build your bank. For him, the purpose of a financial institution was as much about service as it was about the bottom line. He believed that those working in the banking industry have an...

  • Page 4
    ... ATMs, digital and online channels, as well as telephone contact centers. Financial products and services offered include deposits, investments, mortgages, home equity loans, auto loans, student loans, credit cards and other consumer loans. 3. Mortgage Banking Mortgage Banking offers the full range...

  • Page 5
    ... balance sheet growth, lower expenses and further improvement in credit quality. This successful execution helped SunTrust overcome the industry headwinds of reduced mortgage activity and the ongoing impact of the prolonged low-rate environment on net interest income. 2014 Annual Report The result...

  • Page 6
    ...asset quality improvement. Total revenue, excluding the gain on sale of RidgeWorth Capital Management, was relatively stable compared to the prior year, as the impact of a lower net interest margin and the decline in mortgage origination activity was more than offset by solid loan and deposit growth...

  • Page 7
    Financial Highlights (Dollars in millions, except per share data) Year ended December 31 2014 2013 2012 For The Year Net income Net income available to common shareholders Adjusted net income available to common shareholders1 Total revenue - FTE 1, 2 Noninterest expense Common dividends paid $1,...

  • Page 8
    ... platform, SunTrust Robinson Humphrey, continue to yield positive returns, as 2014 marked the seventh consecutive record year of investment banking income. We are applying our expertise from CIB to our Commercial Real Estate and Commercial and Business Banking clients to help them access the capital...

  • Page 9
    ..., which includes deposits and fee income in addition to lending, and when we are unable to meet our internal hurdles, we explore balance sheet management alternatives. Accordingly, we sold over $4 billion of lower-return loans in 2014. Our progress on this strategic initiative has resulted in a much...

  • Page 10
    ... we consolidated 64 decentralized mortgage processing locations into five end-to-end campuses. Additionally, we have continued to increase utilization of technology in certain areas, such as encouraging the usage of e-statements and using scanners to process checks more efficiently in our branches...

  • Page 11
    ... strategic priorities that have driven our success over the past few years - deeper client relationships, balance sheet optimization and efficiency improvement. As one of the largest banks in our markets and an active corporate citizen in the communities we serve, we are keenly aware of our role in...

  • Page 12
    ... businesses nationwide take advantage of opportunities to grow. We upgraded our Treasury & Payments Solutions platforms, and as a result, we were able to help 28% more clients meet their cash management needs. Wholesale Banking The refinancing of our [senior secured] notes and the resultant annual...

  • Page 13
    ... just closing loans and collecting interest." - LightStream client • We integrated the LightStream® lending platform with suntrust.com, giving our clients access to an efficient, user-friendly online application and funding process. Going forward, LightStream will be deployed in branches as...

  • Page 14
    ... efforts, we helped fellow community members obtain health care, find jobs, access resources to improve their financial well-being and more. SunTrust Foundation SunTrust's philanthropy is designed to make a positive and lasting impact year after year. The SunTrust Foundation, the cornerstone of...

  • Page 15
    ... in loans and investments supporting affordable housing, economic development and job growth, community services and the revitalization and stabilization of targeted areas in our communities. • SunTrust funded more than $253 million in Small Business Administration (SBA) 7(a) loans, positioning...

  • Page 16
    ... portal, designed to be a one-stop shop for industry-leading advice and planning tools. Also new this year is the SunTrust Financial Fitness Program for Teammates, an online education program that helps teammates and their families set and achieve financial goals. More than 12,000 have enrolled in...

  • Page 17
    ... three on-site health care clinics and rewarded teammates for taking health actions such as completing their annual physical. Boosting Performance 2014 also marked the inaugural graduating class of the PATHways Professional Banking Operations and Leadership program. This 36-credit, customized certi...

  • Page 18
    ... Chief Financial Officer Mark A. Chancy Wholesale Banking Executive Susan S. Johnson Bradford R. Dinsmore Consumer Banking and Private Wealth Management Executive Chief Marketing Officer Anil T. Cheriyan Chief Information Officer Jerome T. Lienhard, II President and CEO SunTrust Mortgage, Inc...

  • Page 19
    ... 20549 2014 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-08918 SUNTRUST BANKS, INC...

  • Page 20
    ... Disclosure. Item 9: Item 9A: Controls and Procedures. Item 9B: Other Information. PART III Item 10: Item 11: Item 12: Item 13: Item 14: PART IV Item 15: Directors, Executive Officers, and Corporate Governance. Executive Compensation. Security Ownership of Certain Beneficial Owners and Management...

  • Page 21
    ...Employee Retirement Income Security Act of 1974. Exchange Act - Securities Exchange Act of 1934. Fannie Mae - Federal National Mortgage Association. Freddie Mac - Federal Home Loan Mortgage Corporation. FASB - Financial Accounting Standards Board. FDIA - Federal Deposit Insurance Act. FDIC - Federal...

  • Page 22
    ... Government National Mortgage Association. GLB Act - Gramm-Leach-Bliley Act. GSE - Government-sponsored enterprise. HAMP - Home Affordable Modification Program. HOEPA - Home Owner's Equity Protection Act. HRA - Health Reimbursement Account. HUD - U.S. Department of Housing and Urban Development. IIS...

  • Page 23
    SunTrust - SunTrust Banks, Inc. SunTrust Community Capital - SunTrust Community Capital, LLC. TDR - Troubled debt restructuring. TRS - Total return swaps. U.S. - United States. U.S. GAAP - Generally Accepted Accounting Principles in the United States. U.S. Treasury - The United States Department of ...

  • Page 24
    ... deposit, credit, mortgage banking, and trust and investment services. Additional subsidiaries provide asset and wealth management, securities brokerage, and capital market services. SunTrust operates primarily within Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia...

  • Page 25
    ... plan to both the Federal Reserve and the FDIC; (v) limiting debit card interchange fees; (vi) adopting certain changes to shareholder rights and responsibilities, including a shareholder "say on pay" vote on executive compensation; (vii) strengthening the SEC's powers to regulate securities markets...

  • Page 26
    ...) stress tests; (v) single counterparty credit exposure limits; and (vi) remedial actions that must be taken, under certain conditions, in the early stages of financial distress ("early remediation"). The capital stress testing rules were finalized in late 2013. In February 2014, the Federal Reserve...

  • Page 27
    ...order to evaluate the safety and soundness of financial institutions. The Federal Reserve announced that its approval of certain capital actions, such as dividend increases and stock repurchase, will be tied to the level of CET 1, and that bank holding companies must consult with the Federal Reserve...

  • Page 28
    ...provision of electronic funds transfer services for U.S. consumers to recipients in other countries. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, and, as amended by the DoddFrank Act, bank holding companies from any state may acquire banks located in any other...

  • Page 29
    ...'s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge on the Company's Investor Relations website at investors.suntrust.com as...

  • Page 30
    ... commissions and other fees we earn from our brokerage business. Poor economic conditions and volatile or unstable financial markets also can adversely affect our trading and debt and equity underwriting and advisory businesses. Legislation and regulation, including the Dodd-Frank Act, as well as...

  • Page 31
    ... and long-term funding based on the liquidity characteristics of the assets and activities of banking entities over a one-year time horizon. Under the LCR rule our holdings of high-quality liquid assets will increase and the composition of our balance sheet will change. Under the final capital rules...

  • Page 32
    ... of customer deposits and market illiquidity could increase our funding costs. We rely heavily on bank deposits to be a low cost and stable source of funding for the loans we make. We compete with banks and other financial services companies for deposits. If our competitors raise the rates they pay...

  • Page 33
    ... used as collateral by financial institutions to meet their day-to-day cash flows in the short-term debt market. A downgrade of the sovereign credit ratings of the U.S. government and the perceived creditworthiness of U.S. government-related obligations could impact our ability to obtain funding...

  • Page 34
    ... behavior, loan performance, home prices, and other factors. For additional information, see Note 16, "Guarantees," to the Consolidated Financial Statements in this Form 10-K, and the following sections of the MD&A in this Form 10K-"Noninterest Income" and "Critical Accounting Policies." In...

  • Page 35
    ... access capital markets to raise funds to support our business, such changes could affect the cost of such funds or the ability to raise such funds. Our net interest income is the interest we earn on loans, debt securities, and other assets we hold less the interest we pay on our deposits, long-term...

  • Page 36
    ...allow parties to complete financial transactions without banks. For example, consumers can pay bills and transfer funds directly without banks. This process could result in the loss of fee income, as well as the loss of client deposits and the income generated from those deposits. We have businesses...

  • Page 37
    ... activity committed against third parties. For example, in 2014 several national retail merchants suffered data compromises involving the personal and payment card information of SunTrust customers. The perpetrators of this fraud executed unauthorized charges against SunTrust account holders...

  • Page 38
    Third parties with whom we do business or that facilitate our business activities, including exchanges, clearing houses, financial intermediaries, or vendors that provide services or security solutions for our operations, could also be sources of operational and information security risk to us, ...

  • Page 39
    ... of funds legally available for such payments. Although we have historically declared cash dividends on our stock, we are not required to do so. Further, in February 2009, the Federal Reserve required bank holding companies to substantially reduce or eliminate dividends. Since that time, the Federal...

  • Page 40
    ...execute our business strategy and provide high quality service may suffer if we are unable to recruit or retain a sufficient number of qualified employees or if the costs of employee compensation or benefits increase substantially. Further, in June 2010, the Federal Reserve and other federal banking...

  • Page 41
    ... in Item 7, MD&A, "Critical Accounting Policies," Note 1, "Significant Accounting Policies," and Note 18, "Fair Value Election and Measurement," to the Consolidated Financial Statements in this Form 10-K. Further, from time to time, the FASB and SEC change the financial accounting and reporting...

  • Page 42
    ...were leased. The full-service banking offices are located primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia. See Note 8, "Premises and Equipment," to the Consolidated Financial Statements in Item 8 of this Form 10-K for further...

  • Page 43
    ...third, and fourth quarters during 2013. Our common stock was held of record by 26,511 holders at December 31, 2014. See "Unregistered Sales of Equity Securities and Use of Proceeds" below for information on share repurchase activity, announced programs, and the remaining buy back authority under the...

  • Page 44
    ... Company had authority from its Board to repurchase all of the 13.9 million outstanding stock purchase warrants. However, any such repurchase would be subject to the prior approval of the Federal Reserve through the capital planning and stress testing process. On December 15, 2011, SunTrust issued...

  • Page 45
    ... Board and the Federal Reserve in conjunction with the 2014 capital plan. Includes shares repurchased pursuant to SunTrust's employee stock option plans, pursuant to which participants may pay the exercise price upon exercise of SunTrust stock options by surrendering shares of SunTrust common stock...

  • Page 46
    ...value per common share 2 Market capitalization Market price: High Low Close Period End Balances: Total assets Earning assets Loans ALLL Consumer and commercial deposits Brokered time and foreign deposits Long-term debt Total shareholders' equity Selected Average Balances: Total assets Earning assets...

  • Page 47
    ...67 16.54 10.94 Amortization expense related to qualified affordable housing investment costs is recognized in provision for income taxes for the year ended December 31, 2014, as allowed by an accounting standard adopted in 2014. For periods prior to 2014, these amounts were previously recognized in...

  • Page 48
    ...; competition in the financial services industry is intense and could result in losing business or margin declines; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we might not pay dividends on our common stock; our ability to...

  • Page 49
    ... its branches (located primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia) and through other national delivery channels. We operate three business segments: Consumer Banking and Private Wealth Management, Wholesale Banking, and...

  • Page 50
    ... financial results. Table 1 Year Ended December 31 (Dollars in millions, except per share amounts) 2014 $1,722 2013 $1,297 Net income available to common shareholders Form 8-K and other legacy mortgage-related items impacting the periods: Charges for legacy mortgage-related matters Gain on sale...

  • Page 51
    ... quarter of 2014, which resulted in dividends for 2014 of $0.70 per common share, an increase from $0.35 per common share in 2013. See additional details related to our capital actions in the "Capital Resources" section of this MD&A. The Federal Reserve's final rules related to capital adequacy...

  • Page 52
    ... deposits increased 10% and capital markets-related fees were up 9%. Net income also increased compared to 2013, driven by solid revenue growth and a lower provision for credit losses. Fees were up modestly, as lower trading and leasing income, combined with the exit of a legacy affordable housing...

  • Page 53
    ... ALLL Cash and due from banks Other assets Noninterest earning trading assets and derivatives Unrealized gains on securities available for sale, net Total assets Liabilities and Shareholders' Equity Interest-bearing deposits: NOW accounts Money market accounts Savings Consumer time Other time Total...

  • Page 54
    ... student loans Other consumer direct Indirect Credit cards Nonaccrual Securities AFS: Taxable Tax-exempt - FTE 2 LHFS Interest earning trading assets Total increase/(decrease) in interest income - FTE Increase/(Decrease) in Interest Expense NOW accounts Money market accounts Savings Consumer time...

  • Page 55
    ...a result of the improved mix driven by the shift from time deposits to lowercost deposit products, as well as a reduction in rates paid on time deposits as higher rate CDs matured. During 2014, net interest margin declined more than anticipated at the beginning of the year, as Wholesale Banking loan...

  • Page 56
    ...898 Service charges on deposit accounts Other charges and fees Card fees Trust and investment management income Retail investment services Investment banking income Trading income Mortgage production related income Mortgage servicing related income Gain on sale of subsidiary Net securities (losses...

  • Page 57
    ...) Employee compensation Employee benefits Personnel expenses Outside processing and software Operating losses Net occupancy expense Regulatory assessments Equipment expense Marketing and customer development Credit and collection services Consulting and legal fees Amortization Other real estate...

  • Page 58
    ... loans to fund business operations or activities, loans secured by owner-occupied properties, corporate credit cards, and other wholesale lending activities. CRE and commercial construction loan types include investor loans where repayment is largely dependent upon the operation, refinance, or sale...

  • Page 59
    ...footprint compared to our total loan portfolio increased, primarily resulting from loan growth in our CIB and National Consumer Lending businesses, which serve clients nationwide. See Note 6, "Loans," to the Consolidated Financial Statements in this Form 10-K for more information. Table 10 shows the...

  • Page 60
    ... 100% Geography: Florida Georgia Virginia Tennessee North Carolina Maryland South Carolina District of Columbia Total banking region California, Illinois, Pennsylvania, Texas, New Jersey, New York All other states Total outside banking region Total December 31, 2013 Commercial (Dollars in millions...

  • Page 61
    ... 12 months of the end of their draw period, approximately 77% of all accounts, and approximately 65% of accounts with a balance, are closed or refinanced into an amortizing loan or a new line of credit. We perform credit management activities to limit our loss exposure on home equity accounts. These...

  • Page 62
    ... for Credit Summary of Credit Losses Experience Year Ended December 31 (Dollars in millions) Losses," to the Consolidated Financial Statements in this Form 10-K, as well as the "Allowance for Credit Losses" section within "Critical Accounting Policies" in this MD&A for further information regarding...

  • Page 63
    ...and the increasing availability of credit and resultant higher levels of leverage for consumers and commercial borrowers. See "Critical Accounting Policies," in this Form 10-K for additional information related to ALLL. Table 12 December 31 2014 $986 777 174 $1,937 51% 40 9 100% 55% 29 16 100% 2013...

  • Page 64
    ... loan classes declined except other consumer direct loans, which remained relatively unchanged compared to 2013. Lower net charge-offs and foreclosures, together with improved loan performance and NPL sales, contributed to the decrease in NPLs. At December 31, 2014, our ratio of NPLs to total loans...

  • Page 65
    ... are highly dependent on our disposition strategy and buyer opportunities. See Note 18, "Fair Value Election and Measurement," to the Consolidated Financial Statements in this Form 10-K for additional information. Geographically, most of our OREO properties are located in Florida, Georgia, and North...

  • Page 66
    ... home equity lines of credit), $129 million, or 5%, of commercial loans (predominantly income-producing properties), and $126 million, or 4%, of consumer loans. Total TDRs decreased $275 million from December 31, 2013, partially driven by the sale of $149 million of residential mortgage TDRs in 2014...

  • Page 67
    ... prior year, as an increase in corporate and other debt securities was offset by a decrease in net derivative liabilities, resulting from normal business activity. See Note 17, "Derivative Financial Instruments," to the Consolidated Financial Statements in this Form 10-K for additional information...

  • Page 68
    ... - private ABS Corporate and other debt securities Other equity securities1 Total securities AFS 1 At December 31, 2014, other equity securities was comprised of the following: $376 million in FHLB of Atlanta stock, $402 million in Federal Reserve Bank of Atlanta stock, $138 million in mutual fund...

  • Page 69
    ... increase in net unrealized gains due to a decline in market interest rates. During the year ended December 31, 2014, we recorded $15 million in net realized losses related to the sale of securities AFS, compared to net realized gains of $2 million during the year ended December 31, 2013, including...

  • Page 70
    ... change over time. Federal Home Loan Bank and Federal Reserve Bank Stock We acquire capital stock in the FHLB of Atlanta as a precondition for becoming a member of that institution. This enables us to take advantage of competitively priced advances as a wholesale funding source and to access grants...

  • Page 71
    ...268 Rate 0.09% 0.14 0.23 Maximum Outstanding at any Month-End $1,375 2,323 7,283 Funds purchased 1 Securities sold under agreements to repurchase 1 Other short-term borrowings Total December 31, 2013 Balance $1,192 1,759 5,788 $8,739 December 31, 2012 (Dollars in millions) Year Ended December...

  • Page 72
    ... rate Total subsidiaries debt Total long-term debt 1 742 1,283 500 8,207 $13,022 and 45% of unrealized gains on equity securities. Mark-tomarket adjustments related to our credit spreads for fair value debt and index-linked CDs are excluded from regulatory capital. Both the Company and the Bank...

  • Page 73
    .... Tier 1 capital ratios decreased slightly during 2014 due to an increase in our RWA from December 31, 2013, primarily the result of loan growth and an increase in off-balance sheet lending commitments, partially offset by an increase in retained earnings and the issuance of preferred stock. We...

  • Page 74
    ...balance homogeneous loans. The ALLL Committee estimates probable losses by evaluating quantitative and qualitative factors for each loan portfolio segment, including net charge-off trends, internal risk ratings, changes in internal risk ratings, loss forecasts, collateral values, geographic location...

  • Page 75
    ... well as Note 6, "Loans," and Note 7, "Allowance for Credit Losses," to the Consolidated Financial Statements in this Form 10-K. Mortgage Repurchase Reserve We sell residential mortgage loans to investors through whole loan sales in the normal course of our business. The investors are primarily GSEs...

  • Page 76
    ... financial instruments. This includes input from not only the related line of business, but also from risk management and finance, to ultimately arrive at a consensus estimate of the instrument's fair value after evaluating all available information pertaining to fair value. This process involves...

  • Page 77
    ... particularly when pricing service information or observable market trades are not available. In most cases, the current market conditions cause the broker quotes to be indicative and the price indications and broker quotes to be supported by very limited to no recent market activity. In those...

  • Page 78
    ...Company's total equity, an increase in the applicable discount rate, or deterioration in the Wholesale Banking reporting unit's forecasts. Multi-year financial forecasts are developed for each reporting unit by considering several key business drivers such as new business initiatives, client service...

  • Page 79
    ... the Consolidated Financial Statements in this Form 10-K. Pension Accounting Several variables affect the annual cost for our retirement programs. The main variables are: (1) size and characteristics of the eligible population, (2) discount rate, (3) expected long-term rate of return on plan assets...

  • Page 80
    ... plan investments, historical returns, and potential future returns. Our 2014 pension costs reflect an assumed long-term rate of return on plan assets of 7.20% for the SunTrust Banks, Inc. Retirement Plan and 6.65% for a previously acquired National Commerce Financial Corporation Retirement Plan...

  • Page 81
    ..., encompasses information and cyber security; Finance Risk Management; Human Resources; Third-Party Risk Management; Model Risk Management; and Anti-Money Laundering/Bank Secrecy Act. Second line of defense responsibilities include developing appropriate risk management frameworks/ programs that...

  • Page 82
    ..., within policy limits approved by the Board. These limits and guidelines reflect our tolerance for interest rate risk over both short-term and long-term horizons. No limit breaches occurred during the year ended December 31, 2014. The major sources of our non-trading interest rate risk are timing...

  • Page 83
    ... used to actively manage trading risk include scenario analysis, stress testing, profit and loss attribution, and stop loss limits. In addition to VAR, in accordance with the 2013 Market Risk Rule, we also calculate Stressed VAR, which is used as a component of the total market risk-based capital...

  • Page 84
    ...): Ending High Low Average $41 83 18 43 December 31, 2014 $1 1 1 1 $29 92 11 27 December 31, 2013 $2 2 2 3 (Dollars in millions) VAR by Risk Factor (1-day holding period): Equity risk Interest rate risk Credit spread risk VAR total (1-day diversified) The trading portfolio, measured in terms of...

  • Page 85
    ... to the Consolidated Financial Statements in this Form 10-K, and the "Critical Accounting Policies" section of this MD&A. Model risk management: Our model risk management approach for validating and evaluating the accuracy of internal and vended models and associated processes includes developmental...

  • Page 86
    ...and stress testing practices meet or exceed these new standards. Uses of Funds. Our primary uses of funds include the extension of loans and credit, the purchase of investment securities, working capital, and debt and capital service. The Bank and the Parent Company borrow in the money markets using...

  • Page 87
    ...Debt Credit Ratings and Outlook Moody's SunTrust Banks, Inc. Short-term Senior long-term SunTrust Bank Short-term Senior long-term Outlook P-2 A3 Stable A-2 AStable P-2 Baa1 A-2 BBB+ S&P Table 28 December 31, 2014 Fitch F2 BBB+ F2 BBB+ Positive Although the Company's investment portfolio is a use...

  • Page 88
    ...publicly traded securities. We manage the Parent Company cash balance to provide sufficient liquidity to fund all forecasted obligations (primarily debt and capital service) for an extended period of months in accordance with our risk limits. The primary uses of Parent Company liquidity include debt...

  • Page 89
    ... 2012 $349 719 (605) 1,542 (47) 1,495 1,958 Consumer Banking and Private Wealth Management Wholesale Banking Mortgage Banking Corporate Other Reconciling Items 1 Total Corporate Other Consolidated net income 1 Includes differences between net income/(loss) reported for each business segment using...

  • Page 90
    ... Deposits 2014 2013 2012 $86,249 $84,359 $83,903 43,502 39,577 38,712 2,333 3,206 3,638 (72) (4) (66) Consumer Banking and Private Wealth Management Wholesale Banking Mortgage Banking Corporate Other See Note 20, "Business Segment Reporting," to the Consolidated Financial Statements in this Form...

  • Page 91
    ... decline in commercial loan related swap income and $7 million foregone RidgeWorth net interest income. Average long-term debt increased by $2.4 billion, or 27%, and average short-term borrowings increased by $1.7 billion, or 45%, compared to 2013, driven by balance sheet management activities...

  • Page 92
    ... $2.0 billion student loan sale executed in the fourth quarter of 2012 and home equity line paydowns during 2013. These declines were partially offset by increases in other consumer loan categories as a result of higher consumer loan production. Net interest income related to deposits decreased $107...

  • Page 93
    ... and declines in severance costs, incentive compensation and employee benefits related to business performance, and operating losses compared to 2012. Additionally, 2012 expenses also included a $38 million charitable contribution of The Coca-Cola Company stock to the SunTrust Foundation and debt...

  • Page 94
    ... 2014 compared to the fourth quarter of 2013, primarily due to a decline in salaries, incentive compensation, and employee benefits costs, including medical costs, due to a decline in full-time equivalent employees as a result of our ongoing branch staffing model efficiency improvements and the sale...

  • Page 95
    ...share Book value per common share Tangible book value per common share 4 Market capitalization Market price: High Low Close Selected Average Balances: Total assets Earning assets Loans Consumer and commercial deposits Brokered time and foreign deposits Intangible assets including MSRs MSRs Preferred...

  • Page 96
    ... amortization Tangible efficiency ratio 1, 7 Impact of excluding Form 8-K and other legacy mortgage-related items Adjusted tangible efficiency ratio 1, 2, 7 ROE Impact of removing average intangible assets (net of deferred taxes), excluding MSRs, from average common shareholders' equity ROTCE 5 Net...

  • Page 97
    ...and MSRs 11 MSRs Tangible equity Preferred stock Tangible common equity Total assets Goodwill Other intangible assets including MSRs MSRs Tangible assets Tangible equity to tangible assets 8 Tangible book value per common share 4 Total loans Government-guaranteed loans Loans held at fair value Total...

  • Page 98
    ... Measures - Annual Efficiency ratio 1 Impact of excluding amortization Tangible efficiency ratio 1, 7 Impact of excluding Form 8-K and other legacy mortgage-related items Adjusted tangible efficiency ratio 1, 2, 7 ROA Impact of excluding Form 8-K and other legacy mortgage-related items Adjusted ROA...

  • Page 99
    ... Noninterest Expense Employee compensation and benefits Outside processing and software Operating losses Net occupancy expense Regulatory assessments Equipment expense Marketing and customer development Credit and collection services Consulting and legal fees Amortization Other real estate (income...

  • Page 100
    ... net income available to common shareholders, an adjusted efficiency ratio, an adjusted tangible efficiency ratio, adjusted ROA, adjusted ROTCE, and the effective tax rate, excluding Form 8-K items and other legacy mortgage-related items. We believe these measures are useful to investors because...

  • Page 101
    ... DATA Report of Ernst & Young LLP, Independent Registered Public Accounting Firm The Board of Directors and Shareholders of SunTrust Banks, Inc. We have audited the accompanying consolidated balance sheets of SunTrust Banks, Inc. (the Company) as of December 31, 2014 and 2013, and the related...

  • Page 102
    ...2013, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2014 and our report dated February 24, 2015 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, Georgia...

  • Page 103
    ... compensation Employee benefits Outside processing and software Operating losses Net occupancy expense Regulatory assessments Equipment expense Marketing and customer development Credit and collection services Consulting and legal fees Amortization Other real estate (income)/expense Net loss on debt...

  • Page 104
    SunTrust Banks, Inc. Consolidated Statements of Comprehensive Income Year Ended December 31 (Dollars in millions) 2014 $1,774 375 (182) (26) 167 $1,941 2013 $1,344 (597) (253) 252 (598) $746 2012 $1,958 (1,343) (37) (60) (1,440) $518 Net income Components of other comprehensive income/(loss): ...

  • Page 105
    ... Federal funds sold and securities borrowed or purchased under agreements to resell Interest-bearing deposits in other banks Cash and cash equivalents Trading assets and derivatives 1 Securities available for sale 2 Loans held for sale ($1,892 and $1,378 at fair value at December 31, 2014 and 2013...

  • Page 106
    ...) million related to employee benefit plans. At December 31, 2012, includes $520 million in unrealized net gains on AFS securities, $532 million in unrealized net gains on derivative financial instruments, and ($743) million related to employee benefit plans. 3 For the year ended December 31, 2014...

  • Page 107
    ... other short-term borrowings Proceeds from long-term debt Repayments of long-term debt Proceeds from the issuance of preferred stock Repurchase of common stock Common and preferred dividends paid Incentive compensation related activity Net cash provided by/(used in) financing activities Net increase...

  • Page 108
    ... deposit, credit, mortgage banking, and trust and investment services. Additional subsidiaries provide asset and wealth management, securities brokerage and capital market services. SunTrust operates primarily within Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia...

  • Page 109
    ... with its contractual terms, the loan may be returned to accrual status upon meeting all regulatory, accounting, and internal policy requirements. Consumer loans (guaranteed and private student loans, other direct, indirect, and credit card) are considered to be past due when payment is not received...

  • Page 110
    ... court order. To date, the Company's TDRs have been predominantly first and second lien residential mortgages and home equity lines of credit. Prior to granting a modification of a borrower's loan terms, the Company performs an evaluation of the borrower's financial condition and ability to service...

  • Page 111
    ... value, net of estimated selling costs. In the event the Company decides not to proceed with a foreclosure action, the full balance of the loan is charged-off. If a loan remains in the foreclosure process for 12 months past the original charge-off, the Company obtains a new valuation annually. Any...

  • Page 112
    ...reported in mortgage servicing related income in the Consolidated Statements of Income. For additional information on the Company's servicing rights, see Note 9, "Goodwill and Other Intangible Assets." Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are held for sale...

  • Page 113
    ... returned to the Company as deemed appropriate. For additional information on the collateral pledged to secure repurchase agreements, see Note 3, "Federal Funds Sold and Securities Financing Activities," Note 4, "Trading Assets and Liabilities and Derivatives," and Note 5, "Securities Available for...

  • Page 114
    ... include trading securities, securities AFS, and derivative financial instruments. Assets and liabilities that the Company has elected to measure at fair value on a recurring basis include MSRs and certain LHFS, LHFI, trading loans, brokered time deposits, and issuances of fixed rate debt. Other...

  • Page 115
    ...to be entitled in exchange for those goods or services. NOTE 2 - ACQUISITIONS/DISPOSITIONS During the years ended December 31, 2014, 2013, and 2012, the Company had the following notable disposition: (Dollars in millions) 2014 Sale of RidgeWorth Date 5/30/2014 Cash Received/(Paid) $193 Goodwill...

  • Page 116
    ... Consolidated Financial Statements, continued NOTE 3 - FEDERAL FUNDS SOLD AND SECURITIES FINANCING ACTIVITIES Fed funds sold and securities borrowed or purchased under agreements to resell were as follows: (Dollars in millions) December 31, 2014 $38 290 832 December 31, 2013 $75 184 724 Fed funds...

  • Page 117
    ... similar financial instruments. Other tradingrelated activities include acting as a market maker in certain debt and equity securities and related derivatives. The Company also uses end user derivatives to manage interest rate and market risk from non-trading activities. The Company has policies and...

  • Page 118
    ..., $402 million in Federal Reserve Bank of Atlanta stock, $103 million in mutual fund investments, and $1 million of other. The following table presents interest and dividends on securities AFS: Year Ended December 31 (Dollars in millions) 2014 $565 10 38 $613 2013 $537 10 32 $579 2012 $579 15 61...

  • Page 119
    ...sell these securities before their anticipated recovery or maturity. The Company has reviewed its portfolio for OTTI in accordance with the accounting policies in Note 1, "Significant Accounting Policies." Less than twelve months (Dollars in millions) December 31, 2014 Twelve months or longer Fair...

  • Page 120
    ... Net securities (losses)/gains of these securities. During the years ended December 31, 2014, 2013, and 2012, all OTTI recognized in earnings related to private MBS collateralized by residential mortgage loans securitized in 2007 or ABS collateralized by 2004 vintage home equity loans. The Company...

  • Page 121
    ... consumer credit risk scores, rating agency information, borrower/guarantor financial capacity, LTV ratios, collateral type, debt service coverage ratios, collection experience, other internal metrics/analyses, and/or qualitative assessments. For the commercial portfolio, the Company believes...

  • Page 122
    ... $23,443 (Dollars in millions) Other direct December 31, December 31, 2014 2013 $4,023 476 74 $4,573 $2,370 397 62 $2,829 Consumer Loans 3 Indirect December 31, December 31, 2014 2013 $7,661 2,335 648 $10,644 $8,420 2,228 624 $11,272 Credit cards December 31, December 31, 2014 2013 $639 212 50...

  • Page 123
    ... 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 Total LHFI 1 2 Includes $272 million of loans carried at fair...

  • Page 124
    ... loan balances above were $2.5 billion and $2.7 billion of accruing TDRs at amortized cost, at December 31, 2014 and 2013, respectively, of which 96% were current at both year ends. See Note 1, "Significant Accounting Policies," for further information regarding the Company's loan impairment policy...

  • Page 125
    ... to Consolidated Financial Statements, continued Year Ended December 31 2014 (Dollars in millions) 2013 Average Amortized Cost Interest Income Recognized1 Average Amortized Cost 2012 Interest Income Recognized1 Average Amortized Cost Interest Income Recognized1 Impaired loans with no related...

  • Page 126
    ...228 (Dollars in millions) Total $38 7 181 93 1 1 57 2 $380 Commercial loans: C&I CRE Residential loans: Residential mortgages - nonguaranteed Home equity products Residential construction Consumer loans: Other direct Indirect Credit cards Total TDRs 1 2 Includes loans modified under the terms of...

  • Page 127
    ... as a TDR was immaterial to the financial statements during the year ended December 31, 2013. 2012 1 Number of Loans Modified 358 33 16 2,804 3,790 564 127 2,803 1,421 11,916 Principal Forgiveness 2 $5 20 4 29 Rate Modification 2,3 $4 7 - 72 110 1 - - 8 $202 Term Extension and/or Other Concessions...

  • Page 128
    ... 2012 Number of Amortized Loans Cost 84 9 10 141 164 24 4 43 204 683 $5 5 7 20 11 3 - - 1 $52 (Dollars in millions) (Dollars in millions) Commercial loans: C&I Residential loans: Residential mortgages Home equity products Residential construction Consumer loans: Other direct Indirect Credit cards...

  • Page 129
    ...and the reserve for unfunded commitments. Activity in the allowance for credit losses is summarized in the table below: Year Ended December 31 (Dollars in millions) 2014 $2,094 338 4 (607) 162 $1,991 2013 $2,219 548 5 (869) 191 $2,094 2012 $2,505 1,398 (3) (1,907) 226 $2,219 Balance at beginning...

  • Page 130
    ... amounts of premises and equipment subject to mortgage indebtedness (included in long-term debt) were immaterial at December 31, 2014 and 2013. Net premises and equipment included $4 million and $5 million related to capital leases at December 31, 2014 and 2013, respectively. Aggregate rent expense...

  • Page 131
    ... Company completed the sale of its asset management subsidiary, RidgeWorth, during the second quarter of 2014. Also, during the year ended December 31, 2013, branch-managed business banking clients were transferred from Wholesale Banking to Consumer Banking and Private Wealth Management, resulting...

  • Page 132
    ... during the year ended December 31, 2013. The Company determines the fair value of the MSRs using a valuation model that calculates the present value of estimated future net servicing income. The model incorporates a number of assumptions as MSRs do not trade in an active and open 109 market with...

  • Page 133
    ... years ended December 31, 2014, 2013, and 2012, respectively. These net gains/losses are included within mortgage production related income in the Consolidated Statements of Income. These net gains/losses include the change in value of the loans as a result of changes in interest rates from the time...

  • Page 134
    ... beneficiary of this CLO and in connection with the sale of RidgeWorth, the CLO was deconsolidated. At December 31, 2013, the Company's Consolidated Balance Sheets reflected $261 million of loans held by the CLO and $256 million of debt issued by the CLO. At December 31, 2014, all CLOs that the...

  • Page 135
    ... third parties. For additional information on the Company's TRS with these VIEs, see Note 17, "Derivative Financial Instruments." Community Development Investments As part of its community reinvestment initiatives, the Company invests primarily within its footprint in multi-family affordable housing...

  • Page 136
    ... the first quarter of 2014, which allowed amortization of qualified affordable housing investments within the scope of the ASU to be presented net of the income tax credits in the provision for income taxes. During the years ended December 31, 2014, 2013, and 2012, the Company recognized $66 million...

  • Page 137
    ...consolidations, certain leases, sales or transfers of assets, minimum shareholders' equity, and maximum borrowings by the Company. At December 31, 2014, the Company was in compliance with all covenants and provisions of long-term debt agreements. As currently defined by federal bank regulators, long...

  • Page 138
    ... of this additional common stock was incremental to the existing availability under the CCAR capital plans. See additional discussion of the realized tax benefit in Note 14, "Income Taxes." During the years ended December 31, 2014, 2013, and 2012, the Company declared and paid common dividends...

  • Page 139
    ..., the Federal Reserve requires the Company to maintain cash reserves. At December 31, 2014 and 2013, these reserve requirements totaled $1.5 billion and $2.0 billion, respectively and were fulfilled with a combination of cash on hand and deposits at the Federal Reserve. Capital Ratios The Company is...

  • Page 140
    ... income tax expense/(benefit): Federal State Total Total income tax expense The Company adopted accounting guidance effective January 1, 2014, which allowed amortization expense related to qualified affordable housing investments to be presented net of the income tax credits in the provision...

  • Page 141
    ... Consolidated Financial Statements, continued A reconciliation of the expected income tax expense, using the statutory federal income tax rate of 35%, to the Company's actual provision for income taxes and the effective tax rate during the years ended December 31 were as follows: 2014 Percent of Pre...

  • Page 142
    ... incentive plans with cash payouts was $203 million, $150 million, and $155 million for the years ended December 31, 2014, 2013, and 2012. Stock-Based Compensation The Company provides stock-based awards through the 2009 Stock Plan under which the Compensation Committee of the Board of Directors...

  • Page 143
    ...volatility of SunTrust stock. The expected term represented the period of time that the stock options granted were expected to be outstanding and was derived from historical data that was used to evaluate patterns such as stock option exercise and employee termination. The Company used the projected...

  • Page 144
    ... Stock-based compensation tax benefit Retirement Plans Defined Contribution Plan SunTrust's employee benefit program includes a qualified defined contribution plan. For years ended December 31, 2014, 2013, and 2012, the plan provided a dollar for dollar match on the first 6% of eligible pay...

  • Page 145
    ... pre-tax long-term rate of return on plan assets for the Postretirement Welfare Plan is 5.00% for 2015. Assumptions Each year, the SBFC, which includes several members of senior management, reviews and approves the assumptions used in the year-end measurement calculations for each plan. The discount...

  • Page 146
    ... of long-term growth of capital (both 123 principal and income) in order to satisfy the pension plan obligations without undue exposure to risk in any single asset class or investment category. The objectives are accomplished through investments in equities, fixed income, and cash equivalents using...

  • Page 147
    ... premiums, target asset allocations, market corrections, and expenses. Capital market simulations from internal and external sources, survey data, economic forecasts, and actuarial judgment are all used in this process. The expected 2014 long-term gross rate of return on plan assets for the SunTrust...

  • Page 148
    ...will be paid directly from the Company's corporate assets. Net Periodic Benefit Components of net periodic benefit for the year ended December 31 were as follows: Pension Benefits 1 (Dollars in millions) Other Postretirement Benefits 2012 $5 119 (178) 25 - 2 ($27) 2014 $- 3 (5) - 2014 $5 124 (200...

  • Page 149
    ... fees was $5 million and $3 million at December 31, 2014 and 2013, respectively. Loan Sales and Servicing STM, a consolidated subsidiary of the Company, originates and purchases residential mortgage loans, a portion of which are sold to outside investors in the normal course of business, through...

  • Page 150
    ... demand activity for the years ended December 31: (Dollars in millions) The following table summarizes the changes in the Company's reserve for mortgage loan repurchases: Year Ended December 31 (Dollars in millions) 2014 $78 12 (5) $85 2013 $632 114 (668) $78 2012 $320 713 (401) $632 Balance at...

  • Page 151
    ...underlying affordable housing properties, provided that the properties retain value. At December 31, 2014 and 2013, an immaterial amount was accrued for the remainder of tax credits to be delivered, and was recorded in other liabilities in the Consolidated Balance Sheets. Public Deposits The Company...

  • Page 152
    ... affiliate may seek recourse from the customer through cash or securities held in the defaulting customers' account. For the years ended December 31, 2014, 2013, and 2012, STIS and STRH experienced minimal net losses as a result of the indemnity. The clearing agreements expire in May 2020 for both...

  • Page 153
    ...Bank's credit rating. These provisions, if triggered, would either give rise to an ATE that permits the counterparties to closeout net and apply collateral or, where a CSA is present, require the Bank to post additional collateral. At December 31, 2014, the Bank carried senior long-term debt ratings...

  • Page 154
    ... rate contracts covering brokered CDs Total Derivatives not designated as hedging instruments 3 Interest rate contracts covering: Fixed rate debt MSRs LHFS, IRLCs 4 Trading activity 5 Foreign exchange rate contracts covering trading activity Credit contracts covering: Loans Trading activity 6 Equity...

  • Page 155
    ...covering trading activity Credit contracts covering: Loans Trading activity 6 Equity contracts - Trading activity 5 Other contracts: IRLCs and other 7 Commodities Total Total derivatives Total gross derivatives, before netting Less: Legally enforceable master netting agreements Less: Cash collateral...

  • Page 156
    ... the Consolidated Statements of that are used for economic hedging or trading purposes, with Income and the Consolidated Statements of Shareholders' Equity further identification of the underlying risks in the derivatives for the years ended December 31, 2014, 2013 and 2012 are and the hedged items...

  • Page 157
    ... forecasted debt Interest rate contracts hedging floating rate loans 1 Total 1 ($2) Interest on long-term debt 18 $16 Interest and fees on loans During the year ended December 31, 2013, the Company also reclassified $90 million pre-tax gains from AOCI into net interest income. These gains related...

  • Page 158
    ... rate loans Total 1 ($171) Net securities (losses)/gains 2 252 $81 Interest and fees on loans During the year ended December 31, 2012, the Company also recognized $60 million of pre-tax gains directly into net securities (losses)/gains related to mark-to-market changes of The Coca-Cola Company...

  • Page 159
    ... on the net reported amount in the Consolidated Balance Sheets. Also included in the table is financial instrument collateral related to legally enforceable master netting agreements that represents securities collateral received or pledged and customer cash collateral held at third party custodians...

  • Page 160
    ...default. In all cases where the Company made resulting cash payments to settle, the Company collected like amounts from the counterparties to the offsetting purchased CDS. At December 31, 2014 and 2013, the written CDS had remaining terms of four years. The fair values of written CDS were $1 million...

  • Page 161
    ... in the Consolidated Statements of Income. See additional discussion regarding The Coca-Cola Company Agreements in the "Securities Available for Sale" sections of MD&A in this Form 10-K. Fair Value Hedges The Company enters into interest rate swap agreements as part of the Company's risk management...

  • Page 162
    ..., trading loans, brokered time deposits, and issuances of fixed rate debt. The Company elects to measure certain assets and liabilities at fair value to more accurately align its financial performance with the economic value of actively traded or hedged assets or liabilities. The use of fair value...

  • Page 163
    ...Liabilities at Fair Value Assets Trading assets and derivatives: U.S. Treasury securities Federal agency securities U.S. states and political subdivisions MBS - agency CLO securities Corporate and other debt securities CP Equity securities Derivative contracts Trading loans Total trading assets and...

  • Page 164
    ... Residential loans Corporate and other loans Total LHFS LHFI MSRs Liabilities Trading liabilities and derivatives: U.S. Treasury securities Corporate and other debt securities Equity securities Derivative contracts Total trading liabilities and derivatives Brokered time deposits Long-term debt Other...

  • Page 165
    Notes to Consolidated Financial Statements, continued The following tables present the difference between the aggregate fair value and the UPB of trading loans, LHFS, LHFI, brokered time deposits, and long-term debt instruments for which the FVO has been elected. For LHFS and LHFI for which the FVO ...

  • Page 166
    ... mortgage servicing income recognized upon the sale of loans reported at LOCOM. Changes in fair value for the year ended December 31, 2014 exclude accrued interest for the period then ended. Interest income or interest expense on trading loans, LHFS, LHFI, brokered time deposits, and long-term debt...

  • Page 167
    ...mortgage servicing income recognized upon the sale of loans reported at LOCOM. 2 Changes in fair value for the year ended December 31, 2012 exclude accrued interest for the period then ended. Interest income or interest expense on trading loans, LHFS, LHFI, brokered time deposits, and long-term debt...

  • Page 168
    ... highly rated. The Company estimates the fair value of this CP based on observable pricing from executed trades of similar instruments; thus, CP is classified as level 2. Equity securities Level 3 equity securities classified as securities AFS include FHLB of Atlanta stock and Federal Reserve Bank...

  • Page 169
    ... the Company's sales and trading business are commercial and corporate leveraged loans that are either traded in the market or for which similar loans trade. The Company elected to measure these loans at fair value since they are actively traded. For the years ended December 31, 2014, 2013, and 2012...

  • Page 170
    ... estimated trading levels of the debt or other relevant market data. For the years ended December 31, 2014 and 2013, the Company recognized an immaterial amount of losses due to changes in its own credit spread on its brokered time deposits carried at fair value. For the year ended December 31, 2012...

  • Page 171
    Notes to Consolidated Financial Statements, continued Long-term debt The Company has elected to measure at fair value certain fixed rate debt issuances of public debt which are valued by obtaining quotes from a third party pricing service and utilizing broker quotes to corroborate the reasonableness...

  • Page 172
    ... pricing/Discounted cash flow Matrix pricing Internal model Indicative pricing based on overcollateralization ratio Discount margin Indicative pricing Pull through rate MSR value Securities AFS: U.S. states and political subdivisions MBS - private ABS Corporate and other debt securities Other equity...

  • Page 173
    ... and 2 during the years ended December 31, 2014 and 2013. Fair Value Measurements Using Significant Unobservable Inputs Transfers to/from other balance sheet line items Included in earnings (held at December 31, 2014) 1 (Dollars in millions) Beginning balance January 1, 2014 Included in earnings...

  • Page 174
    ...balance sheet line items Transfers into Level 3 Transfers out of Level 3 Fair value December 31, 2013 Included in earnings (held at December 31, 2013) 1 (Dollars in millions) OCI Purchases Sales Settlements Assets Trading assets and derivatives: CDO/CLO securities ABS Derivative contracts, net...

  • Page 175
    ..., market capitalization rates, and tax credit market pricing. Due to the lack of comparable sales in the marketplace, these valuations were considered level 3. During the year ended December 31, 2013, the Company recognized impairment of $3 million on its held for use consolidated affordable housing...

  • Page 176
    ... 5,040 22,542 1,699 125,833 Fair Value $5,263 5,040 22,542 1,700 121,341 Financial assets: Cash and cash equivalents Trading assets and derivatives Securities AFS LHFS LHFI, net Financial liabilities: Deposits Short-term borrowings Long-term debt Trading liabilities and derivatives 129,759 8,739...

  • Page 177
    ...estimated fair value. (e) Deposit liabilities with no defined maturity such as DDAs, NOW/money market accounts, and savings accounts have a fair value equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for CDs are estimated using a discounted cash...

  • Page 178
    ... of New York and state and federal courts in Arkansas, California, Texas, and Washington. Plaintiffs alleged violations of Sections 11 and 12 of the Securities Act of 1933 and/or state law for allegedly false and misleading disclosures in connection with various debt and preferred stock offerings...

  • Page 179
    ... the FRB in which SunTrust, SunTrust Bank, and STM agreed to strengthen oversight of, and improve risk management, internal audit, and compliance programs concerning the residential mortgage loan servicing, loss mitigation, and foreclosure activities of STM. SunTrust continues its engagement with...

  • Page 180
    ... made in connection with loan sales and seeking indemnification against losses allegedly suffered by RFC as a result of such alleged breaches. The case was transferred to the United States Bankruptcy Court for the Southern District of New York. The Company filed a motion to transfer the case back to...

  • Page 181
    ...internet (www.suntrust.com), mobile banking, and telephone (1-800-SUNTRUST). Financial products and services offered to consumers and small business clients include deposits, home equity lines and loans, credit lines, indirect auto, student lending, bank card, other lending products, and various fee...

  • Page 182
    ..., or held in the Company's loan portfolio. Mortgage Banking services loans for itself and for other investors, and includes ValuTree Real Estate Services, LLC, a tax service subsidiary. Corporate Other includes management of the Company's investment securities portfolio, long-term debt, end user...

  • Page 183
    Notes to Consolidated Financial Statements, continued Year Ended December 31, 2014 Consumer Banking and Private Wealth Management $41,694 86,249 47,377 86,982 - $2,636 1 2,637 191 2,446 1,528 2,887 1,087 400 687 - $687 Wholesale Banking $62,643 43,502 74,307 50,242 - $1,682 139 1,821 71 1,750 1,104 ...

  • Page 184
    Notes to Consolidated Financial Statements, continued Year Ended December 31, 2012 Consumer Banking and Private Wealth Management $41,823 83,917 47,022 84,662 - $2,722 - 2,722 583 2,139 1,495 3,082 552 203 349 - $349 (Dollars in millions) Wholesale Banking $50,741 38,697 63,296 46,618 - $1,531 119...

  • Page 185
    ... on AFS securities: Year Ended December 31 2014 2013 2012 $15 (6) $9 ($2) 1 ($1) ($417) 154 ($263) $26 373 399 (147) $252 Affected line item in the Consolidated Statements of Income ($2,279) Net securities (losses)/gains 810 Provision for income taxes ($1,469) ($143) Interest and fees on loans 53...

  • Page 186
    ... on loans Trading income Gain on sale of subsidiary Other income Total income Expense Interest on short-term borrowings Interest on long-term debt Employee compensation and benefits 2 Service fees to subsidiaries Other expense Total expense Income/(loss) before income tax benefit and equity in...

  • Page 187
    ... SunTrust Bank Interest-bearing deposits held at other banks Cash and cash equivalents Trading assets and derivatives Securities available for sale Loans to subsidiaries Investment in capital stock of subsidiaries stated on the basis of the Company's equity in subsidiaries' capital accounts: Banking...

  • Page 188
    ... Net cash (used in)/provided by investing activities Cash Flows from Financing Activities: Net (decrease)/increase in short-term borrowings Proceeds from long-term debt Repayment of long-term debt Proceeds from the issuance of preferred stock Repurchase of common stock Incentive compensation related...

  • Page 189
    ... reporting is effective. Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements at, and for, the year ended December 31, 2014, has issued a report on the effectiveness of the Company's internal 166 Item 9B. None. OTHER INFORMATION

  • Page 190
    ... Item 13. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information at the captions "Compensation Policies that Affect Risk Management," "Executive Compensation" ("Compensation Discussion and Analysis," "Compensation Committee Report," "2014 Summary Compensation Table," "2014 Grants of Plan...

  • Page 191
    ...2004 Annual Report on Form 10-K. First Supplemental Indenture between National Commerce Financial Corporation and the Bank of New York, as Trustee, dated as of March 27, 1997, incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-4 of National Commerce Bancorporation (File...

  • Page 192
    ...'s Current Report on Form 8-K filed December 20, 2012. Form of Series F Preferred Stock Certificate, incorporated by reference to Exhibit 4.2 to Registrant's Current Report on Form 8-K filed November 7, 2014. SunTrust Banks, Inc. Annual Incentive Plan (formerly Management Incentive Plan), amended...

  • Page 193
    ... Agreement (2-year cliff vested) under the SunTrust Banks, Inc. 2009 Stock Plan; (xxi) Form of Restricted Stock Unit Award Agreement, 2013 RORWA; (xxii) Form of Restricted Stock Unit Award Agreement, 2013 TSR; (xxiii) Form of Restricted Stock Unit Agreement, 2014 TSR/Return on Tangible Common Equity...

  • Page 194
    ... to Exhibit 10.23 to the Registrant's Annual Report on Form 10-K filed February 24, 2012. Consent Order dated April 13, 2011 by and among the Board of Governors of the Federal Reserve System, SunTrust Banks, Inc.; SunTrust Bank; and SunTrust Mortgage, Inc., incorporated by reference to Exhibit 10...

  • Page 195
    ...Long-Term Incentive Plan, incorporated by reference to Appendix A to the definitive proxy statement of GB&T Bancshares Inc. filed April 18, 2007 (File No. 005-82430). Ratio of Earnings to Fixed Charges and Preferred Stock Dividends. Registrant's Subsidiaries. Consent of Independent Registered Public...

  • Page 196
    ... Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SUNTRUST BANKS, INC. Dated: February 24, 2015 By: /s/ William H. Rogers, Jr. William H. Rogers, Jr., Chairman and Chief Executive Officer POWER...

  • Page 197
    ... of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signatures Principal Executive Officer: /s/ William H. Rogers, Jr. William H. Rogers, Jr. Principal Financial Officer...

  • Page 198
    ...use the "Contact IR" link on the Investor Relations website. Credit Ratings Ratings as of December 31, 2014. Standard & Poor's Moody's Bank Level Long-term ratings Senior debt Subordinated debt Short-term ratings Corporate Level Long-term ratings Senior debt Subordinated debt Preferred stock Short...

  • Page 199
    SunTrust Banks, Inc. 303 Peachtree Street, NE Atlanta, GA 30308 SunTrust Bank, Member FDIC. ©2015 SunTrust Banks, Inc. SunTrust and How can we help you shine? are federally registered service marks of SunTrust Banks, Inc.