SunTrust 2014 Annual Report Download - page 24

1
PART I
Item 1. BUSINESS
General
The Company, a Georgia corporation, a BHC, and a financial
holding company, is one of the nation's largest banking
organizations whose businesses provide a broad range of
financial services to consumer, business, corporate and
institutional clients. SunTrust was incorporated in 1984 under
the laws of the State of Georgia. The principal executive offices
of the Company are located in SunTrust Plaza, Atlanta, Georgia
30308. Additional information relating to our businesses and our
subsidiaries is included in the information set forth in Item 7,
Management's Discussion and Analysis of Financial Condition
and Results of Operations, and Note 20, “Business Segment
Reporting,” to the Consolidated Financial Statements in Item 8
of this Form 10-K.
Primary Market Areas
Through its principal subsidiary, SunTrust Bank, the Company
offers a full line of financial services for consumers and
businesses including 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, and the District of Columbia and enjoys strong market
positions in these markets. In certain businesses, SunTrust also
operates in select markets nationally. SunTrust provides clients
with a selection of branch-based and technology-based banking
channels, including the internet, mobile, ATMs, and telebanking.
SunTrust's client base encompasses a broad range of individuals
and families, businesses, institutions, and governmental
agencies. SunTrust operated the following business segments
during 2014, with the remainder in Corporate Other: Consumer
Banking and Private Wealth Management, Wholesale Banking,
and Mortgage Banking.
Omni-channel Strategy
Over the last several years, the Company has significantly
increased investments in technology and other capabilities to
provide clients with increased functionality and self-service
capabilities. This resulted in increased utilization of lower-cost
self-service channels, which has enabled us to reduce our branch
count by 3% in 2014 and 13% since 2011. Going forward, we
will continue to optimize our delivery network and the pace will
be dependent upon client needs and preferences. We have also
made investments in technology to grow revenues. Among these
were the acquisition in 2012 of an on-line lending portal that
became the foundation for our LightStream TM super-prime
lending offering.
Acquisition and Disposition Activity
As part of its operations, the Company evaluates, when deemed
appropriate, the potential acquisition of financial institutions and
other business types eligible for financial holding company
ownership or control. Additionally, the Company regularly
analyzes the values of and may submit bids for assets of such
financial institutions and other businesses. The Company may
also consider the potential disposition of certain of its assets,
branches, subsidiaries, or lines of businesses. During the second
quarter of 2014, the Company completed the sale of its
RidgeWorth asset management subsidiary and recognized a $105
million pre-tax gain. Additional information for this transaction
is included in Note 2, “Acquisitions/Dispositions,” to the
Consolidated Financial Statements in Item 8 of this Form 10-K,
which is incorporated herein by reference.
Government Supervision and Regulation
As a BHC and a financial holding company, the Company is
subject to the regulation and supervision of the Federal Reserve,
and as a Georgia-chartered BHC, by the Georgia Department of
Banking and Finance. The Company's banking subsidiary,
SunTrust Bank, is a Georgia state-chartered bank with branches
in Georgia, Florida, the District of Columbia, Maryland,
Virginia, North Carolina, South Carolina, Tennessee, Alabama,
West Virginia, Mississippi, and Arkansas. SunTrust Bank is a
member of the Federal Reserve System and is regulated by the
Federal Reserve, the FDIC, and the Georgia Department of
Banking and Finance.
The Company's banking subsidiary is subject to various
requirements and restrictions under federal and state law,
including requirements to maintain cash reserves against
deposits, restrictions on the types and amounts of loans that may
be made and the interest that may be charged thereon, and
limitations on the types of investments that may be made and the
types of services that may be offered. Various consumer laws
and regulations also affect the operations of SunTrust Bank and
its subsidiaries. In addition to the impact of regulation, banks are
affected significantly by the actions of the Federal Reserve as it
attempts to control the money supply and credit availability in
order to influence the economy.
The Company's non-banking subsidiaries are regulated and
supervised by various other regulatory bodies. For example,
STRH is a broker-dealer registered with the SEC and is a FINRA
member. STIS is also a broker-dealer and investment adviser
registered with the SEC and a member of FINRA. GenSpring is
an investment adviser registered with the SEC and a member of
the National Futures Association. Furthermore, under the Dodd-
Frank Act, the Federal Reserve may regulate and supervise any
subsidiary of the Company to determine (i) the nature of the
operations and financial condition of the company, (ii) the
financial, operational and other risks of the company, (iii) the
systems for monitoring and controlling such risks, and (iv)
compliance with Title I of the Dodd-Frank Act.
The BHC Act limits the activities in which bank holding
companies and their subsidiaries may engage. As a BHC that has
elected to become a financial holding company, the Company
may engage in additional activities “closely related to banking,"
including expanded securities activities, insurance sales,
underwriting activities, and other financial activities, and may
also acquire securities firms and insurance companies, subject
to certain conditions. The expanded activities in which the
Company may engage are limited to those that are (i) financial
in nature or incidental to such financial activity, and/or (ii)