SUNTRUST BANKS INC, 10-K filed on 2/23/2018
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Feb. 16, 2018
Jun. 30, 2017
Dec. 31, 2016
Entity Registrant Name
SUNTRUST BANKS INC 
 
 
 
Entity Central Index Key
0000750556 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
 
Document Type
10-K 
 
 
 
Document Period End Date
Dec. 31, 2017 
 
 
 
Document Fiscal Year Focus
2017 
 
 
 
Document Fiscal Period Focus
FY 
 
 
 
Amendment Flag
false 
 
 
 
Entity Common Stock, Shares Outstanding
 
468,300,176 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
Entity Voluntary Filers
No 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
Common Stock, Par or Stated Value Per Share
$ 1.00 
 
 
$ 1.00 
Entity Public Float
 
 
$ 26.8 
 
Consolidated Statements of Income (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Interest Income
 
 
 
Interest and fees on loans
$ 5,385 
$ 4,939 
$ 4,506 
Interest and fees on loans held for sale
99 
92 
82 
Interest and Dividend Income, Securities, Available-for-sale
774 
651 
593 
Trading account interest and other
129 
96 
84 
Total interest income
6,387 
5,778 
5,265 
Interest Expense
 
 
 
Interest on deposits
404 
259 
219 
Interest Expense, Long-term Debt
288 
260 
252 
Interest on other borrowings
62 
38 
30 
Total interest expense
754 
557 
501 
Net, interest income
5,633 
5,221 1
4,764 2
Provision for Loan, Lease, and Other Losses
409 3
444 1 3
165 2 3
Interest Income (Expense), after Provision for Loan Loss
5,224 
4,777 
4,599 
Noninterest Income
 
 
 
Service charges on deposit accounts
603 
630 
622 
Fees and Commissions, Other
385 
380 
377 
Fees and Commissions, Credit and Debit Cards
344 
327 
329 
Investment Banking Revenue
599 
494 
461 
Trading Gain (Loss)
189 
211 
181 
Fees and Commissions, Fiduciary and Trust Activities
309 
304 
334 
Investment Advisory, Management and Administrative Fees
278 
281 
300 
Fees and Commissions, Mortgage Banking
231 
366 
270 
Servicing Fees, Net
(191)
(189)
(169)
Gain (Loss) on Disposition of Business
107 
commercial real estate related income
123 4
69 4
56 4
Gain (Loss) on Sale of Securities, Net
(108)
21 
Noninterest Income, Other Operating Income
103 4
128 4
148 4
Total noninterest income
3,354 
3,383 1
3,268 2
Noninterest Expense
 
 
 
Employee compensation
2,854 
2,698 
2,576 
Other Labor-related Expenses
403 
373 
366 
Outside processing and software
826 
834 
815 
Net occupancy expense
377 
349 
341 
Federal Deposit Insurance Corporation Premium Expense
187 
173 
139 
Marketing and Advertising Expense
232 
172 
151 
Equipment Expense
164 
170 
164 
Other Staff Expense
121 
67 
65 
Professional Fees
71 
93 
73 
Operating losses
40 
108 
56 
Amortization
75 
49 
40 
Other Noninterest Expense
414 
382 
374 
Noninterest Expense
5,764 
5,468 1
5,160 2
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest
2,814 
2,692 
2,707 
Income Tax Expense (Benefit)
532 
805 
764 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
2,282 
1,887 1
1,943 2
Net Income (Loss) Attributable to Noncontrolling Interest
1
10 2
Net Income (Loss) Attributable to Parent
2,273 
1,878 1
1,933 2
Net Income (Loss) Available to Common Stockholders, Basic
$ 2,179 
$ 1,811 
$ 1,863 
Earnings Per Share, Diluted
$ 4.47 
$ 3.60 
$ 3.58 
Earnings Per Share, Basic
$ 4.53 
$ 3.63 
$ 3.62 
Common Stock, Dividends, Per Share, Declared
$ 1.32 
$ 1.00 
$ 0.92 
Weighted Average Number of Shares Outstanding, Diluted
486,954 
503,466 
520,586 
Weighted Average Number of Shares Outstanding, Basic
481,339 
498,638 
514,844 
Consolidated Statements of Comprehensive Income Consolidated Statement of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Net Income (Loss) Attributable to Parent
$ 2,273 
$ 1,878 1
$ 1,933 2
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
61 
(197)
(163)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax
(87)
(244)
(10)
Other Comprehensive Income (Loss), Brokered Time Deposits, Net of Tax
(1)
Other Comprehensive Income (Loss), Long Term Debt, Adjustment, Net of Tax
(2)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax
24 
88 
(165)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
(356)
(338)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ 2,274 
$ 1,522 
$ 1,595 
Consolidated Statements of Comprehensive Income Consolidated Statement of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax
$ 29 
$ (117)
$ (93)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax
(145)
(5)
Other Comprehensive Income (Loss), Brokered Time Deposits, Tax
Other Comprehensive Income (Loss), Long Term Debt, Adjustment, Tax
(1)
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax
$ 138 
$ 52 
$ (103)
Consolidated Balance Sheets (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Assets
 
 
Cash and Due from Banks
$ 5,349 
$ 5,091 
Federal Funds Sold and Securities Purchased under Agreements to Resell
1,538 
1,307 
Interest-bearing Deposits in Banks and Other Financial Institutions
25 
25 
Cash and cash equivalents
6,912 
6,423 
Trading Securities
5,093 1
6,067 1
Available-for-sale Securities
31,416 2
30,672 2
Loans Held for Sale
2,290 3
4,169 3
Loans held for investment
143,181 4
143,298 4
Loans and Leases Receivable, Allowance
(1,735)
(1,709)
Net loans
141,446 
141,589 
Property, Plant and Equipment, Net
1,734 
1,556 
Goodwill
6,331 
6,337 
Intangible Assets, Net (Excluding Goodwill)
1,791 5
1,657 5
Other Assets
8,949 
6,405 
Total assets
205,962 
204,875 
Liabilities and Shareholders' Equity
 
 
Noninterest-bearing consumer and commercial deposits
42,784 
43,431 
Interest-bearing Deposit Liabilities
117,996 
116,967 
Total deposits
160,780 
160,398 
Federal Funds Purchased
2,561 
2,116 
Securities Sold under Agreements to Repurchase
1,503 
1,633 
Other Short-term Borrowings
717 
1,015 
Long-term Debt
9,785 6 7
11,748 6 7
Trading liabilities
1,283 
1,351 
Other Liabilities
4,179 
2,996 
Total liabilities
180,808 
181,257 
Preferred Stock, Value, Outstanding
2,475 
1,225 
Common Stock, Value, Outstanding
550 
550 
Additional Paid in Capital
9,000 
9,010 
Retained earnings
17,540 
16,000 
Treasury Stock, Value
(3,591)8
(2,346)8
Accumulated Other Comprehensive Income (Loss), Net of Tax
(820)
(821)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest
25,154 
23,618 
Liabilities and Equity
205,962 
204,875 
Common Stock, Shares, Outstanding
470,931,000 9
491,188,000 9
Common shares authorized
750,000,000 
750,000,000 
Preferred Stock, Shares Outstanding
25,000 
12,000 
Preferred Stock, Shares Authorized
50,000,000 
50,000,000 
Treasury shares of common stock
79,133,000 
58,738,000 
Treasury Stock and Other
 
 
Liabilities and Shareholders' Equity
 
 
Treasury Stock, Value
(3,694)
(2,448)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest
(3,591)8
(2,346)8
Stockholders' Equity Attributable to Noncontrolling Interest
103 
103 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets
 
 
Loans held for investment
179 
211 
Liabilities and Shareholders' Equity
 
 
Long-term Debt
189 
222 
Restricted Stock [Member]
 
 
Liabilities and Shareholders' Equity
 
 
Common Stock, Shares, Outstanding
9,000 
11,000 
Trading Securities [Member]
 
 
Liabilities and Shareholders' Equity
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
1,086 
1,437 
Available-for-sale Securities [Member]
 
 
Liabilities and Shareholders' Equity
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
$ 223 
$ 0 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Loans Held-for-sale, Fair Value Disclosure
$ 1,577 
$ 3,540 
 
Loans Receivable, Fair Value Disclosure
196 
222 
 
Long-term Debt, Fair Value
530 
963 
 
Common stock, par value
$ 1.00 
$ 1.00 
 
Loans and Leases Receivable, Gross
143,181 1
143,298 1
 
Long-term Debt
9,785 2 3
11,748 2 3
 
Common Stock, Shares, Outstanding
470,931 4
491,188 4
 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
 
Loans and Leases Receivable, Gross
179 
211 
 
Long-term Debt
189 
222 
 
Treasury Stock and Other
 
 
 
Stockholders' Equity Attributable to Noncontrolling Interest
103 
103 
108 
Residential Portfolio Segment [Member]
 
 
 
Loans and Leases Receivable, Gross
38,620 
38,990 
 
Restricted Stock [Member]
 
 
 
Common Stock, Shares, Outstanding
11 
 
Trading Securities [Member]
 
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
1,086 
1,437 
 
Available-for-sale Securities [Member]
 
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
223 
 
Fair Value, Measurements, Recurring [Member]
 
 
 
Loans Held-for-sale, Fair Value Disclosure
1,577 
3,540 
 
Loans Receivable, Fair Value Disclosure
196 
222 
 
Servicing Asset at Fair Value, Amount
1,710 
1,572 
 
Long-term Debt, Fair Value
530 
963 
 
Brokered Time Deposits [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Deposits, Fair Value Disclosure
$ 236 
$ 78 
 
Consolidated Statements of Shareholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock and Other
AOCI Attributable to Parent [Member]
Total shareholders' equity at Dec. 31, 2014
$ 23,005 
$ 1,225 
$ 550 
$ 9,089 
$ 13,295 
$ (1,032)1
$ (122)
Stock Issued During Period, Value, Employee Benefit Plan
 
 
 
1
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Common Stock, Shares, Outstanding
 
 
509,000,000 
 
 
 
 
Net Income (Loss) Attributable to Parent
1,933 2
 
 
 
1,933 
 
 
Other Comprehensive Income (Loss), Net of Tax
(338)
 
 
 
 
 
(338)
Dividends, Common Stock, Cash
(475)
 
 
 
(475)
 
 
Dividends, Preferred Stock, Cash3
(64)
 
 
 
(64)
 
 
Treasury Stock, Shares, Acquired
 
 
(17,000,000)
 
 
 
 
Treasury Stock, Value, Acquired, Cost Method
(679)
 
 
 
 
(679)1
 
Payments for Repurchase of Warrants
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
 
 
1,000,000 
 
 
 
 
Stock Issued During Period, Value, Stock Options Exercised
12 
 
 
18 
 
30 1
 
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures
 
 
 
 
 
 
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures
24 
 
 
23 
(3)
1
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition
16 
 
 
 
 
16 1
 
Total shareholders' equity at Dec. 31, 2015
23,437 
1,225 
550 
9,094 
14,686 
(1,658)1
(460)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Common Stock, Shares, Outstanding
491,188,000 4
 
491,000,000 
 
 
 
 
Cumulative Effect of Credit Risk Adjustment6
 
 
 
 
(5)5
Net Income (Loss) Attributable to Parent
1,878 7
 
 
 
1,878 
 
 
Other Comprehensive Income (Loss), Net of Tax
(356)
 
 
 
 
 
(356)
Noncontrolling Interest, Period Increase (Decrease)
(5)
 
 
 
 
(5)1
 
Dividends, Common Stock, Cash
(498)
 
 
 
(498)
 
 
Dividends, Preferred Stock, Cash3
(66)
 
 
 
(66)
 
 
Treasury Stock, Shares, Acquired
 
 
(20,000,000)
 
 
 
 
Treasury Stock, Value, Acquired, Cost Method
(806)
 
 
 
 
(806)1
 
Payments for Repurchase of Warrants
(24)
 
 
(24)
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
 
 
1,000,000 
 
 
 
 
Stock Issued During Period, Value, Stock Options Exercised
25 8
 
 
40 8
 
65 1
 
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures
 
 
1,000,000 
 
 
 
 
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures
31 8
 
 
(20)8
(5)
56 1
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition
 
 
 
 
1
 
Total shareholders' equity at Dec. 31, 2016
23,618 
1,225 
550 
9,010 
16,000 
(2,346)1
(821)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Common Stock, Shares, Outstanding
470,931,000 4
 
471,000,000 
 
 
 
 
Net Income (Loss) Attributable to Parent
2,273 
 
 
 
2,273 
 
 
Other Comprehensive Income (Loss), Net of Tax
 
 
 
 
 
Dividends, Common Stock, Cash
(634)
 
 
 
(634)
 
 
Dividends, Preferred Stock, Cash3
(94)
 
 
 
(94)
 
 
Stock Issued During Period, Value, New Issues
1,239 
1,250 
 
(11)
 
 
 
Treasury Stock, Shares, Acquired
 
 
(22,000,000)
 
 
 
 
Treasury Stock, Value, Acquired, Cost Method
(1,314)
 
 
 
 
(1,314)1
 
Payments for Repurchase of Warrants
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
830,383 
 
1,000,000 
 
 
 
 
Stock Issued During Period, Value, Stock Options Exercised
21 
 
 
(15)
 
36 1
 
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures
 
 
1,000,000 
 
 
 
 
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures
44 
 
 
16 
(5)
33 1
 
Total shareholders' equity at Dec. 31, 2017
$ 25,154 
$ 2,475 
$ 550 
$ 9,000 
$ 17,540 
$ (3,591)1
$ (820)
[3] For the year ended December 31, 2017, dividends were $4,056 per share for both Perpetual Preferred Stock Series A and B, $5,875 per share for Perpetual Preferred Stock Series E, $5,625 per share for Perpetual Preferred Stock Series F, $3,128 per share for Perpetual Preferred Stock Series G, and $669 per share for Perpetual Preferred Stock Series H.For the year ended December 31, 2016, dividends were $4,067 per share for both Perpetual Preferred Stock Series A and B, $5,875 per share for Perpetual Preferred Stock Series E, and $5,625 per share for Perpetual Preferred Stock Series F.For the year ended December 31, 2015, dividends were $4,056 per share for both Perpetual Preferred Stock Series A and B, and $5,875 per share for Perpetual Preferred Stock Series E, and $6,219 per share for Perpetual Preferred Stock Series F.
Consolidated Statements of Shareholders' Equity (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Treasury Stock, Value
$ (3,591)1
$ (2,346)1
 
Common stock dividends, per share
$ 1.32 
$ 1.00 
$ 0.92 
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net
 
(4)
 
Treasury Stock and Other
 
 
 
Treasury Stock, Value
(3,694)
(2,448)
(1,764)
Deferred Compensation Equity
(1)
(2)
Stockholders' Equity Attributable to Noncontrolling Interest
$ 103 
$ 103 
$ 108 
Series A Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 4,056 
$ 4,067 
$ 4,056 
Series B Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 4,056 
$ 4,067 
$ 4,056 
Series E Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 5,875 
$ 5,875 
$ 5,875 
Series F Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 5,625 
$ 5,625 
$ 6,219 
Series G Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 3,128 
 
 
Series H Preferred Stock [Member]
 
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 669 
 
 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Cash Flows from Operating Activities:
 
 
 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
$ 2,282 
$ 1,887 1
$ 1,943 2
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
 
 
 
Gain (Loss) on Disposition of Business
107 
Depreciation, Amortization and Accretion, Net
727 
725 
786 
Deferred Income Tax Expense (Benefit)
344 
111 
21 
Payments to Acquire Mortgage Servicing Rights (MSR)
411 
312 
238 
Provisions For Credit Losses And Foreclosed Properties
418 
449 
176 
Stock Option Compensation And Amortization Of Restricted Stock Compensation
160 
126 
89 
Gain (Loss) on Sale of Securities, Net
(108)
21 
Gain (Loss) on Sale of Loans and Leases
269 
428 
323 
Net decrease/(increase) in loans held for sale
(2,099)
1,819 
(1,625)
Increase (Decrease) in Trading Securities
(834)
342 
(67)
Net (increase)/decrease in other assets
(235)
800 
407 
Increase (Decrease) in Other Operating Liabilities
(911)
(274)
(166)
Net Cash Provided by (Used in) Operating Activities, Continuing Operations
5,509 
(681)
3,552 
Cash Flows from Investing Activities:
 
 
 
Proceeds from Maturities, Prepayments and Calls of Available-for-sale Securities
4,186 
5,108 
5,680 
Proceeds from Sale of Available-for-sale Securities
2,854 
197 
2,708 
Payments to Acquire Available-for-sale Securities
8,299 
8,610 
9,882 
Proceeds from (payments for) Originations and Purchases of Loans Held-for-investment
(2,425)
(9,032)
(5,897)
Proceeds from sales of loans
720 
1,612 
2,127 
Payments for (Proceeds from) Mortgage Servicing Rights
(7)
(171)
(117)
Capital expenditures
(410)
(283)
(186)
Payments related to acquisitions, including contingent consideration
(211)
(30)
Proceeds from Divestiture of Businesses
261 
Proceeds from Sale of Other Real Estate
235 
233 
281 
Net Cash Provided by (Used in) Investing Activities, Continuing Operations
(2,885)
(11,157)
(5,316)
Cash Flows from Financing Activities:
 
 
 
Net (decrease)/increase in total deposits
382 
10,568 
9,263 
Net increase/(decrease) in funds purchased, securities sold under agreements to repurchase, and other short-term borrowings
17 
37 
(4,559)
Proceeds from Issuance of Long-term Debt
2,844 
6,705 
1,351 
Repayment of long-term debt
(4,562)
(3,231)
(5,684)
Proceeds from Issuance of Preferred Stock and Preference Stock
1,239 
Payments for Repurchase of Common Stock
(1,314)
(806)
(679)
Payments for Repurchase of Warrants
(24)
Common and preferred dividends paid
(723)
(564)
(539)
Payments Related to Tax Withholding for Share-based Compensation
(39)
(48)
(36)
Proceeds from the exercise of stock options
21 
25 
17 
Net Cash Provided by (Used in) Financing Activities, Continuing Operations
(2,135)
12,662 
(866)
Cash and Cash Equivalents, Period Increase (Decrease)
489 
824 
(2,630)
Cash and cash equivalents
6,423 
5,599 
8,229 
Cash and cash equivalents
6,912 
6,423 
5,599 
Supplemental Disclosures:
 
 
 
Interest Paid
730 
559 
523 
Income Taxes Paid
415 
813 
497 
Proceeds from Income Tax Refunds
Transfer of Loans Held-for-sale to Portfolio Loans
19 
30 
741 
Transfer of Portfolio Loans and Leases to Held-for-sale
288 
360 
1,790 
Transfer to Other Real Estate
57 
59 
67 
Amortization Of Deferred Gain On Sale Lease Back Of Premises
17 
43 
54 
Non-cash impact of debt acquired by purchaser in leverage lease sale
$ 184 
$ 74 
$ 190 
Significant Accounting Policies
Significant Accounting Policies [Text Block]
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
General
SunTrust, one of the nation's largest commercial banking organizations, is a financial services holding company with its headquarters located in Atlanta, Georgia. Through its principal subsidiary, SunTrust Bank, the Company offers a full line of financial services for consumers, businesses, corporations, institutions, and not-for-profit entities, both through its branches (located primarily in Florida, Georgia, Virginia, North Carolina, Tennessee, Maryland, South Carolina, and the District of Columbia) and through other national delivery channels. In addition to deposit, credit, and trust and investment services provided by the Bank, the Company's other subsidiaries provide capital markets, mortgage banking, securities brokerage, investment banking, and wealth management services. The Company operates and measures business activity across two business segments: Consumer and Wholesale, with functional activities included in Corporate Other. For additional information on the Company’s business segments, see Note 20, “Business Segment Reporting.”

Principles of Consolidation and Basis of Presentation
The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries after elimination of significant intercompany accounts and transactions. In the opinion of management, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of operations in these financial statements, have been made.
The Company holds VIs, which are contractual, ownership or other interests that fluctuate with changes in the fair value of a VIE's net assets. The Company consolidates a VIE if it is the primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the financial performance of the VIE and the obligation to absorb losses or rights to receive benefits through its VIs that could potentially be significant to the VIE. To determine whether or not a VI held by the Company could potentially be significant to the VIE, both qualitative and quantitative factors regarding the nature, size, and form of the Company's involvement with the VIE are considered. The assessment of whether or not the Company is the primary beneficiary of a VIE is performed on an ongoing basis. The Company consolidates VOEs that are controlled through the Company's equity interests or by other means.
Investments in entities for which the Company has the ability to exercise significant influence, but not control, over operating and financing decisions are accounted for using the equity method of accounting. These investments are included in Other assets in the Consolidated Balance Sheets at cost, adjusted to reflect the Company's portion of income, loss, or dividends of the investee. Non marketable equity investments that do not meet the criteria to be accounted for under the equity method and that do not result in consolidation of the investee are accounted for under the cost method of accounting. Cost method investments are included in Other assets in the Consolidated Balance Sheets and dividends received from these investments are included as a component of Other noninterest income in the Consolidated Statements of Income, to the extent the dividends are distributed from net accumulated earnings of the investee since the date of acquisition. Dividends received from these investments in excess of earnings, subsequent to the date of investment, are recorded as a reduction to the cost of the investment.
Results of operations of acquired entities are included from the date of acquisition. Results of operations associated with entities or net assets sold are included through the date of disposition. The Company reports any noncontrolling interests in its subsidiaries in the equity section of the Consolidated Balance Sheets and separately presents the income or loss attributable to the noncontrolling interest of a consolidated subsidiary in its Consolidated Statements of Income.
Assets and liabilities of acquired entities are accounted for under the acquisition method of accounting, whereby the purchase price of an acquired entity is allocated to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The excess of the purchase price over the amount allocated to the assets acquired and liabilities assumed is recorded as goodwill.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes; actual results could vary from these estimates. Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
The Company evaluated events that occurred between December 31, 2017 and the date the accompanying financial statements were issued, and there were no material events, other than those already discussed in this Form 10-K, that would require recognition in the Company's Consolidated Financial Statements or disclosure in the accompanying Notes.

Cash and Cash Equivalents
Cash and cash equivalents include Cash and due from banks, Interest-bearing deposits in other banks, Fed Funds sold, and Securities borrowed or purchased under agreements to resell. Cash and cash equivalents have maturities of three months or less, and accordingly, the carrying amount of these instruments is deemed to be a reasonable estimate of fair value.

Trading Activities and Securities AFS
Debt securities and marketable equity securities are classified at trade date as trading or securities AFS. Trading assets and liabilities are measured at fair value with changes in fair value recognized within Noninterest income. Securities AFS are used as part of the overall asset and liability management process to optimize income and market performance over an entire interest rate cycle. Interest income and dividends on securities AFS are recognized in interest income on an accrual basis. Premiums and discounts on debt securities AFS are amortized or accreted as an adjustment to yield over the life of the security. The Company estimates principal prepayments on securities AFS for which prepayments are probable and the timing and amount of prepayments can be reasonably estimated. The estimates are informed by analyses of both historical prepayments and anticipated macroeconomic conditions, such as spot interest rates compared to implied forward interest rates. The estimate of prepayments for these debt securities impacts their lives and thereby the amortization or accretion of associated premiums and discounts. Securities AFS are measured at fair value with unrealized gains and losses, net of any tax effect, included in AOCI as a component of shareholders’ equity. Realized gains and losses, including OTTI, are determined using the specific identification method and are recognized as a component of Noninterest income in the Consolidated Statements of Income.
Securities AFS are reviewed for OTTI on a quarterly basis. In determining whether OTTI exists for securities in an unrealized loss position, the Company assesses whether it has the intent to sell the security or, for debt securities, the Company assesses the likelihood of selling the security prior to the recovery of its amortized cost basis. If the Company intends to sell the debt security or it is more-likely-than-not that the Company will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recognized as a component of Noninterest income in the Consolidated Statements of Income. If the Company does not intend to sell the debt security and it is more-likely-than-not that the Company will not be required to sell the debt security prior to recovery of its amortized cost basis, only the credit component of any impairment of a debt security is recognized as a component of Noninterest income in the Consolidated Statements of Income, with the remaining impairment balance recorded in OCI.
The OTTI review for marketable equity securities includes an analysis of the facts and circumstances of each individual investment and focuses on the severity of loss, the length of time the fair value has been below cost, the expectation for that security's performance, the financial condition and near-term prospects of the issuer, and management's intent and ability to hold the security to recovery. A decline in value of an equity security that is considered to be other-than-temporary is recognized as a component of Noninterest income in the Consolidated Statements of Income.
Nonmarketable equity securities are accounted for under the cost or equity method and are included in Other assets in the Consolidated Balance Sheets. The Company reviews nonmarketable securities accounted for under the cost method on a quarterly basis, and reduces the asset value when declines in value are considered to be other-than-temporary. Equity method investments are recorded at cost, adjusted to reflect the Company’s portion of income, loss, or dividends of the investee. Realized income, realized losses, and estimated other-than-temporary losses on cost and equity method investments are recognized in Noninterest income in the Consolidated Statements of Income.
For additional information on the Company’s securities activities, see Note 4, “Trading Assets and Liabilities and Derivatives,” and Note 5, “Securities Available for Sale.”

Loans Held for Sale
The Company’s LHFS generally includes certain commercial loans and consumer loans. Loans are initially classified as LHFS when they are individually identified as being available for immediate sale and management has committed to a formal plan to sell them. LHFS are recorded at either fair value, if elected, or the lower of cost or fair value. Any origination fees and costs for LHFS recorded at LOCOM are capitalized in the basis of the loan and are included in the calculation of realized gains and losses upon sale. Origination fees and costs are recognized in earnings at the time of origination for LHFS that are elected to be measured at fair value. Fair value is derived from observable current market prices, when available, and includes loan servicing value. When observable market prices are not available, the Company uses judgment and estimates fair value using internal models, in which the Company uses its best estimates of assumptions it believes would be used by market participants in estimating fair value. Adjustments to reflect unrealized gains and losses resulting from changes in fair value and realized gains and losses upon ultimate sale of the loans are classified as Noninterest income in the Consolidated Statements of Income.
The Company may transfer certain loans to LHFS measured at LOCOM. At the time of transfer, any credit losses subject to charge-off in accordance with the Company's policy are recorded as a reduction in the ALLL. Any subsequent losses, including those related to interest rate or liquidity related valuation adjustments, are recorded as a component of Noninterest income in the Consolidated Statements of Income. The Company may also transfer loans from LHFS to LHFI. If an LHFS for which fair value accounting was elected is transferred to held for investment, it will continue to be accounted for at fair value in the LHFI portfolio. For additional information on the Company’s LHFS activities, see Note 6, “Loans.”

Loans Held for Investment
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are considered LHFI. The Company’s loan balance is comprised of loans held in portfolio, including commercial loans and consumer loans. Interest income on loans, except those classified as nonaccrual, is accrued based upon the outstanding principal amounts using the effective yield method.
Commercial loans (C&I, CRE, and commercial construction) are considered to be past due when payment is not received from the borrower by the contractually specified due date. The Company typically classifies commercial loans as nonaccrual when one of the following events occurs: (i) interest or principal has been past due 90 days or more, unless the loan is both well secured and in the process of collection; (ii) collection of contractual interest or principal is not anticipated; or (iii) income for the loan is recognized on a cash basis due to the deterioration in the financial condition of the debtor. When a loan is placed on nonaccrual, accrued interest is reversed against interest income. Interest income on commercial nonaccrual loans, if recognized, is recognized after the principal has been reduced to zero. If and when commercial borrowers demonstrate the ability to repay a loan classified as nonaccrual in accordance with its contractual terms, the loan may be returned to accrual status upon meeting all regulatory, accounting, and internal policy requirements.
Consumer loans secured by residential real estate (guaranteed and nonguaranteed residential mortgages, residential home equity products, and residential construction loans) are considered to be past due when a monthly payment is due and unpaid for one month. Guaranteed residential mortgages continue to accrue interest regardless of delinquency status because collection of principal and interest is reasonably assured by the government. Nonguaranteed residential mortgages and residential construction loans are generally placed on nonaccrual when three payments are past due. Residential home equity products are generally placed on nonaccrual when payments are 90 days past due. The exceptions for nonguaranteed residential mortgages, residential construction loans, and residential home equity products are: (i) when the borrower has declared bankruptcy, in which case, they are moved to nonaccrual status once they become 60 days past due, (ii) loans discharged in Chapter 7 bankruptcy that have not been reaffirmed by the borrower, in which case, they are reclassified as TDRs and moved to nonaccrual status, and (iii) second lien loans, which are classified as nonaccrual when the first lien loan is classified as nonaccrual, even if the second lien loan is performing. When a loan is placed on nonaccrual, accrued interest is reversed against interest income. Interest income on nonaccrual consumer loans secured by residential real estate is recognized on a cash basis. Nonaccrual consumer loans secured by residential real estate are typically returned to accrual status once they no longer meet the delinquency threshold that resulted in them initially being moved to nonaccrual status, with the exception of the aforementioned Chapter 7 bankruptcy loans, which remain on nonaccrual until there is six months of payment performance following discharge by the bankruptcy court.
All other consumer loans (guaranteed student, other direct, indirect, and credit card loans) are considered to be past due when payment is not received from the borrower by the contractually specified due date. Guaranteed student loans continue to accrue interest regardless of delinquency status because collection of principal and interest is reasonably assured. Other direct and indirect loans are typically placed on nonaccrual when payments have been past due for 90 days or more, except when the borrower has declared bankruptcy, in which case they are moved to nonaccrual status once they become 60 days past due. When a loan is placed on nonaccrual, accrued interest is reversed against interest income. Interest income on nonaccrual loans, if recognized, is recognized on a cash basis. Nonaccrual consumer loans are typically returned to accrual status once they are no longer past due.
TDRs are loans in which the borrower is experiencing financial difficulty at the time of restructure and the borrower received an economic concession either from the Company or as the product of a bankruptcy court order. A restructuring that results in only a delay in payments that is insignificant is not considered an economic concession. 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 under the potential modified loan terms. The types of concessions generally granted are extensions of the loan maturity date and/or reductions in the original contractual interest rate. In certain situations, the Company may offer to restructure a loan in a manner that ultimately results in the forgiveness of a contractually specified principal balance. Typically, if a loan is accruing interest at the time of modification, the loan remains on accrual status and is subject to the Company’s charge-off and nonaccrual policies. See the “Allowance for Credit Losses” section below for further information regarding these policies. If a loan is on nonaccrual before it is determined to be a TDR then the loan remains on nonaccrual. Typically, TDRs may be returned to accrual status if there has been at least a six month sustained period of repayment performance by the borrower. Generally, once a loan becomes a TDR, the Company expects that the loan will continue to be reported as a TDR for its remaining life, even after returning to accruing status, unless the modified rates and terms at the time of modification were available to the borrower in the market or the loan is subsequently restructured with no concession to the borrower and the borrower is no longer in financial difficulty. Interest income recognition on impaired loans is dependent upon accrual status, TDR designation, and loan type as discussed above.
For loans accounted for at amortized cost, fees and incremental direct costs associated with the loan origination and pricing process, as well as premiums and discounts, are deferred and amortized over the respective loan terms. Fees received for providing loan commitments that result in funded loans are recognized over the term of the loan as an adjustment of the yield. If a loan is never funded, the commitment fee is recognized in Noninterest income at the expiration of the commitment period. For any newly-originated loans that are accounted for at fair value, the origination fees are recognized in Noninterest income while the origination costs are recognized in Noninterest expense, at the time of origination. For additional information on the Company's loans activities, see Note 6, “Loans.”

Allowance for Credit Losses
The allowance for credit losses is composed of the ALLL and the reserve for unfunded commitments. The Company’s ALLL reflects probable current inherent losses in the LHFI portfolio based on management’s evaluation of the size and current risk characteristics of the loan portfolio. The Company employs a variety of modeling and estimation techniques to measure credit risk and construct an appropriate and adequate ALLL. Quantitative and qualitative asset quality measures are considered in estimating the ALLL. Such evaluation considers a number of factors for each of the loan portfolio segments, including, but not limited to, net charge-off trends, internal risk ratings, changes in internal risk ratings, loss forecasts, collateral values, geographic location, delinquency rates, nonperforming and restructured loan status, origination channel, product mix, underwriting practices, industry conditions, and economic trends. Additionally, refreshed FICO scores are considered for consumer loans and single name borrower concentration is considered for commercial loans. These credit quality factors are incorporated into various loss estimation models and analytical tools utilized in the ALLL process and/or are qualitatively considered in evaluating the overall reasonableness of the ALLL.
Large commercial nonaccrual loans, certain consumer loans (nonguaranteed residential mortgages, residential home equity products, residential construction, other direct, indirect, and credit card), and commercial loans whose terms have been modified in a TDR are reviewed to determine the amount of specific allowance required in accordance with applicable accounting guidance. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the agreement. If necessary, an allowance is established for these specifically evaluated impaired loans. The specific allowance established for these loans is based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flows, the loan’s estimated market value, or the estimated fair value of the underlying collateral, net of estimated selling costs. Any change in the present value attributable to the passage of time is recognized through the Provision for credit losses.
General allowances are established for loans and leases grouped into pools based on similar characteristics. In this process, general allowance factors are based on an analysis of historical charge-off experience, expected loss factors derived from the Company's internal risk rating process, portfolio trends, and regional and national economic conditions. Other adjustments may be made to the ALLL after an assessment of internal and external influences on credit quality that may not be fully reflected in the historical loss or risk rating data. These influences may include elements such as changes in credit underwriting, concentration risk, macroeconomic conditions, and/or recent observable asset quality trends.
Commercial loans are charged off when they are considered uncollectible. Losses on unsecured consumer loans are generally recognized at 120 days past due, except for losses on credit cards, which are recognized when the loans are 180 days past due, and losses on guaranteed student loans, which are recognized when the loans are 270 days past due and payment from the guarantor is processed by the servicer. However, if the borrower is in bankruptcy, the loan is charged-off in the month the loan becomes 60 days past due. Losses, as appropriate, on consumer loans secured by residential real estate, are typically recognized at 120 or 180 days past due, depending on the loan and collateral type, in compliance with the FFIEC guidelines. However, if the borrower is in bankruptcy, the secured asset is evaluated once the loan becomes 60 days past due. The loan value in excess of the secured asset value is written down or charged-off after the valuation occurs. Additionally, if a residential loan is discharged in Chapter 7 bankruptcy and not reaffirmed by the borrower, the Company's policy is to immediately charge-off the excess of the carrying amount over the fair value of the collateral.
The Company uses numerous sources of information when evaluating a property’s value. Estimated collateral valuations are based on appraisals, broker price opinions, recent sales of foreclosed properties, automated valuation models, other property-specific information, and relevant market information, supplemented by the Company’s internal property valuation analysis. The value estimate is based on an orderly disposition of the property, inclusive of marketing costs. In limited instances, the Company adjusts externally provided appraisals for justifiable and well-supported reasons, such as an appraiser not being aware of certain property-specific factors or recent sales information.
For commercial loans secured by real estate, an acceptable third party appraisal or other form of evaluation, as permitted by regulation, is obtained prior to the origination of the loan and upon a subsequent transaction involving a material change in terms. In addition, updated valuations may be obtained during the life of a loan, as appropriate, such as when a loan's performance materially deteriorates. In situations where an updated appraisal has not been received or a formal evaluation performed, the Company monitors factors that can positively or negatively impact property value, such as the date of the last valuation, the volatility of property values in specific markets, changes in the value of similar properties, and changes in the characteristics of individual properties. Changes in collateral value affect the ALLL through the risk rating or impaired loan evaluation process. Charge-offs are recognized when the amount of the loss is quantifiable and timing is known. The charge-off is measured based on the difference between the loan’s carrying value, including deferred fees, and the estimated realizable value of the property, net of estimated selling costs. When valuing a property for the purpose of determining a charge-off, a third party appraisal or an independently derived internal evaluation is generally employed.
For nonguaranteed mortgage loans secured by residential real estate where the Company is proceeding with a foreclosure action, a new valuation is obtained prior to the loan becoming 180 days past due and, if required, the loan is written down to its realizable 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 may obtain a new valuation. Any additional loss based on the new valuation is charged-off. At foreclosure, a new valuation is obtained and the loan is transferred to OREO at fair value less estimated selling costs; any loan balance in excess of the transfer value is charged-off. Estimated declines in value of the collateral between these formal evaluation events are captured in the ALLL based on changes in the house price index in the applicable metropolitan statistical area or other market information.
In addition to the ALLL, the Company also estimates probable losses related to unfunded lending commitments, such as letters of credit and binding unfunded loan commitments. Unfunded lending commitments are analyzed and segregated by risk based on the Company’s internal risk rating scale. These risk classifications, in combination with probability of commitment usage, existing economic conditions, and any other pertinent information, result in the estimation of the reserve for unfunded lending commitments. The Unfunded commitments reserve is reported in Other liabilities on the Consolidated Balance Sheets and the provision associated with changes in the Unfunded commitment reserve is recognized in the Provision for credit losses in the Consolidated Statements of Income. For additional information on the Company's allowance for credit loss activities, see Note 7, “Allowance for Credit Losses.”

Premises and Equipment
Premises and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is calculated predominantly using the straight-line method over the assets’ estimated useful lives. Leasehold improvements are amortized using the straight-line method over the shorter of the improvements' estimated useful lives or the lease term. Construction and software in process includes costs related to in-process branch expansion, branch renovation, and software development projects. Upon completion, branch and office related projects are maintained in premises and equipment while completed software projects are reclassified to Other assets in the Consolidated Balance Sheets. Maintenance and repairs are charged to expense, and improvements that extend the useful life of an asset are capitalized and depreciated over the remaining useful life. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. For additional information on the Company’s premises and equipment activities, see Note 8, “Premises and Equipment.”

Goodwill and Other Intangible Assets
Goodwill represents the excess purchase price over the fair value of identifiable net assets of acquired companies. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination.
Goodwill is tested at the reporting unit level for impairment, at least annually as of October 1, or as events and circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount.
If, after considering all relevant events and circumstances, the Company determines it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing an impairment test is not necessary. If the Company elects to bypass the qualitative analysis, or concludes via qualitative analysis that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, a two-step goodwill impairment test is performed. In the first step, the fair value of each reporting unit is compared with its carrying value. If the fair value is greater than the carrying value, then the reporting unit's goodwill is deemed not to be impaired. If the fair value is less than the carrying value, then the second step is performed, which measures the amount of impairment by comparing the carrying amount of goodwill to its implied fair value. If the implied fair value of the goodwill exceeds the carrying amount, there is no impairment. If the carrying amount exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess.
The Company has identified intangible assets with finite and indefinite lives. Intangible assets that have finite lives are amortized over their useful lives and carried at amortized cost. Intangible assets that have indefinite lives are initially measured at fair value and are not amortized until the useful life is no longer considered indefinite. Indefinite-lived intangibles are tested for impairment at least annually; however, all intangible assets are evaluated for impairment whenever events or changes in circumstances indicate it is more likely than not that the asset is impaired. For additional information on the Company’s activities related to goodwill and other intangibles, see Note 9, “Goodwill and Other Intangible Assets.”

Servicing Rights
The Company recognizes as assets the rights to service loans, either when the loans are sold and the associated servicing rights are retained or when servicing rights are purchased from a third party. All servicing rights are initially measured at fair value.
Fair value is determined by projecting net servicing cash flows, which are then discounted to estimate fair value. The fair value of servicing rights is impacted by a variety of factors, including prepayment assumptions, discount rates, delinquency rates, contractually specified servicing fees, servicing costs, and underlying portfolio characteristics. The underlying assumptions and estimated values are corroborated by values received from independent third parties and comparisons to market transactions.
The Company has elected to subsequently account for its residential MSRs under the fair value measurement method and actively hedges the change in fair value of its residential MSRs. The Company has elected to subsequently account for all other servicing rights, which include commercial mortgage and consumer loan servicing rights, under the amortization method. Commercial mortgage and consumer loan servicing rights are amortized in proportion to and over the period of estimated net servicing income. Servicing rights accounted for under the amortization method are periodically tested for impairment by comparing the carrying amount of the servicing rights to the estimated fair value.
Servicing rights are included in Other intangible assets on the Consolidated Balance Sheets. For residential MSRs, both servicing fees, which are recognized when they are received, and changes in the fair value of MSRs are reported in Mortgage servicing related income in the Consolidated Statements of Income. For commercial mortgage servicing rights, servicing fees, amortization, and any impairment is recognized in Commercial real estate related income in the Consolidated Statements of Income. For all other servicing rights, the related servicing fees, amortization, and any impairment are recognized in Other noninterest 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 and are initially recorded at fair value, less estimated selling costs. To the extent fair value, less cost to sell, is less than the loan’s cost basis, the difference is charged to the ALLL at the date of transfer into OREO. The Company estimates market values based primarily on appraisals and other market information. Pursuant to an asset transfer into OREO, the fair value of the asset, less cost to sell at the date of transfer, becomes the new cost basis of the asset. Any subsequent changes in value as well as gains or losses from the disposition on these assets are reported in Noninterest expense in the Consolidated Statements of Income. For additional information on the Company's activities related to OREO, see Note 18, “Fair Value Election and Measurement.”

Loan Sales and Securitizations
The Company sells and at times may securitize loans and other financial assets. When the Company securitizes assets, it may hold a portion of the securities issued, including senior interests, subordinated and other residual interests, interest-only strips, and principal-only strips, all of which are considered retained interests in the transferred assets. Retained securitized interests are recognized and initially measured at fair value. The interests in securitized assets held by the Company are typically classified as either securities AFS or trading assets and are measured at fair value, which is based on independent, third party market prices, market prices for similar assets, or discounted cash flow analyses. If market prices are not available, fair value is calculated using management’s best estimates of key assumptions, including credit losses, loan repayment speeds, and discount rates commensurate with the risks involved.
The Company transfers first lien residential mortgage loans in conjunction with Ginnie Mae and GSE securitization transactions, whereby the loans are exchanged for cash or securities that are readily redeemable for cash and servicing rights are retained. Net gains/losses on the sale of residential mortgage LHFS are recorded at inception of the associated IRLCs and reflect the change in value of the loans resulting from changes in interest rates from the time the Company enters into IRLCs with borrowers until the loans are sold, adjusted for pull through rates and excluding hedge transactions initiated to mitigate this market risk. Net gains related to the sale of residential mortgage loans are recorded within Mortgage production related income in the Consolidated Statements of Income.
The Company also sells commercial mortgage loans to Fannie Mae and Freddie Mac and issues and sells Ginnie Mae commercial MBS backed by FHA insured loans. The loans and securities are exchanged for cash and servicing rights are retained. Gains and losses from the sale of these commercial mortgage loans and securities are recorded within Commercial real estate related income in the Consolidated Statements of Income. For additional information on the Company’s securitization activities, see Note 10, “Certain Transfers of Financial Assets and Variable Interest Entities.”

Income Taxes
The Company's provision for income taxes is based on income and expense reported for financial statement purposes after adjustments for permanent differences such as interest income from lending to tax-exempt entities, tax credits from community reinvestment activities, and amortization expense related to qualified affordable housing investment costs. In computing the provision for income taxes, the Company evaluates the technical merits of its income tax positions based on current legislative, judicial, and regulatory guidance. The deferral method of accounting is used on investments that generate investment tax credits, such that the investment tax credits are recognized as a reduction to the related investment. Additionally, the Company recognizes all excess tax benefits and deficiencies on employee share-based payments as a component of the Provision for income taxes in the Consolidated Statements of Income. These tax effects, generally determined upon the exercise of stock options or vesting of restricted stock, are treated as discrete items in the period in which they occur.
DTAs and DTLs result from differences between the timing of the recognition of assets and liabilities for financial reporting purposes and for income tax purposes. These deferred assets and liabilities are measured using the enacted tax rates and laws that are expected to apply in the periods in which the DTAs or DTLs are expected to be realized. Subsequent changes in the tax laws require adjustment to these deferred assets and liabilities with the cumulative effect included in the Provision for income taxes for the period in which the change is enacted. A valuation allowance is recognized for a DTA, if based on the weight of available evidence, it is more likely than not that some portion or all of the DTA will not be realized.
Interest and penalties related to the Company’s tax positions are recognized as a component of the Provision for income taxes in the Consolidated Statements of Income. For additional information on the Company’s activities related to income taxes, see Note 14, “Income Taxes.”
Earnings Per Share
Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period, plus common share equivalents calculated for stock options, warrants, and restricted stock outstanding using the treasury stock method.
The Company has issued certain restricted stock awards, which are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents. These restricted shares are considered participating securities. Accordingly, the Company calculated net income available to common shareholders pursuant to the two-class method, whereby net income is allocated between common shareholders and participating securities.
Net income available to common shareholders represents net income after preferred stock dividends, gains or losses from any repurchases of preferred stock, and dividends and allocation of undistributed earnings to the participating securities. For additional information on the Company’s EPS, see Note 12, “Net Income Per Common Share.”

Securities Sold Under Agreements to Repurchase and Securities Borrowed or Purchased Under Agreements to Resell
Securities sold under agreements to repurchase and securities borrowed or purchased under agreements to resell are accounted for as collateralized financing transactions and are recorded at the amounts at which the securities were sold or acquired, plus accrued interest. The fair value of collateral pledged or received is continually monitored and additional collateral is obtained or requested to be 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 Sale."

Guarantees
The Company recognizes a liability at the inception of a guarantee at an amount equal to the estimated fair value of the obligation. A guarantee is defined as a contract that contingently requires a company to make a payment to a guaranteed party based upon changes in an underlying asset, liability, or equity security of the guaranteed party, or upon failure of a third party to perform under a specified agreement. The Company considers the following arrangements to be guarantees: certain asset purchase/sale agreements with recourse, standby letters of credit and financial guarantees, certain indemnification agreements included within third party contractual arrangements, and certain derivative contracts. For additional information on the Company’s guarantor obligations, see Note 16, “Guarantees.”

Derivative Instruments and Hedging Activities
The Company records derivative contracts at fair value in the Consolidated Balance Sheets. Accounting for changes in the fair value of a derivative depends upon whether or not it has been designated in a formal, qualifying hedging relationship. 
Changes in the fair value of derivatives not designated in a hedging relationship are recorded in Noninterest income. This includes derivatives that the Company enters into in a dealer capacity to facilitate client transactions and as a risk management tool to economically hedge certain identified risks, along with certain IRLCs on residential mortgage and commercial loans that are a normal part of the Company’s operations. The Company also evaluates contracts, such as brokered deposits and debt, to determine whether any embedded derivatives are required to be bifurcated and separately accounted for as freestanding derivatives.
Certain derivatives used as risk management tools are designated as accounting hedges of the Company’s exposure to changes in interest rates or other identified market risks. The Company prepares written hedge documentation for all derivatives which are designated as hedges of (1) changes in the fair value of a recognized asset or liability (fair value hedge) attributable to a specified risk or (2) a forecasted transaction, such as the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). The written hedge documentation includes identification of, among other items, the risk management objective, hedging instrument, hedged item and methodologies for assessing and measuring hedge effectiveness and ineffectiveness, along with support for management’s assertion that the hedge will be highly effective. Methodologies related to hedge effectiveness and ineffectiveness are consistent between similar types of hedge transactions and include (i) statistical regression analysis of changes in the cash flows of the actual derivative and a perfectly effective hypothetical derivative, or (ii) statistical regression analysis of changes in the fair values of the actual derivative and the hedged item.
For designated hedging relationships, the Company performs retrospective and prospective effectiveness testing using quantitative methods and does not assume perfect effectiveness through the matching of critical terms. Assessments of hedge effectiveness and measurements of hedge ineffectiveness are performed at least quarterly. Changes in the fair value of a derivative that is highly effective and that has been designated and qualifies as a fair value hedge are recorded in current period earnings, along with the changes in the fair value of the hedged item that are attributable to the hedged risk. The effective portion of the changes in the fair value of a derivative that is highly effective and that has been designated and qualifies as a cash flow hedge is initially recorded in AOCI and reclassified to earnings in the same period that the hedged item impacts earnings; any ineffective portion is recorded in current period earnings.
Hedge accounting ceases for hedging relationships that are no longer deemed effective, or for which the derivative has been terminated or de-designated. For discontinued fair value hedges where the hedged item remains outstanding, the hedged item would cease to be remeasured at fair value attributable to changes in the hedged risk and any existing basis adjustment would be recognized as an adjustment to earnings over the remaining life of the hedged item. For discontinued cash flow hedges, the unrealized gains and losses recorded in AOCI would be reclassified to earnings in the period when the previously designated hedged cash flows occur unless it was determined that transaction was probable to not occur, whereby any unrealized gains and losses in AOCI would be immediately reclassified to earnings.
It is the Company's policy to offset derivative transactions with a single counterparty as well as any cash collateral paid to and received from that counterparty for derivative contracts that are subject to ISDA or other legally enforceable netting arrangements and meet accounting guidance for offsetting treatment. For additional information on the Company’s derivative activities, see Note 17, “Derivative Financial Instruments,” and Note 18, “Fair Value Election and Measurement.”

Stock-Based Compensation
The Company sponsors various stock-based compensation plans under which RSUs, restricted stock, and phantom stock units may be granted to certain employees. The Company measures the grant date fair value of the RSUs and restricted stock, which is expensed over the award's vesting period. For service-based awards, compensation expense is amortized on a straight-line basis and recognized in Employee compensation in the Consolidated Statements of Income. Additionally, the Company estimates the number of awards for which it is probable that service will be rendered and adjusts compensation cost accordingly. Estimated forfeitures are subsequently adjusted to reflect actual forfeitures. For performance-based awards, compensation expense is amortized over the vesting period and recognized in Employee compensation in the Consolidated Statements of Income. These performance-based awards may be adjusted based on the estimated outcome of the award's associated performance conditions, which are based on the Company's performance and/or its performance relative to its peers.
The phantom stock units are subject to variable accounting and grant certain employees the contractual right to receive an amount in cash equal to the fair market value of a share of common stock on the specified date set forth in the award agreement, typically the vesting date. For additional information on the Company’s stock-based compensation plans, see Note 15, “Employee Benefit Plans.”

Employee Benefits
Employee benefits expense includes expenses related to (i) net periodic benefit costs or credits associated with the pension and other postretirement benefit plans, (ii) contributions under the defined contribution plans, (iii) the amortization of restricted stock, (iv) the issuance of phantom stock units, (v) historical stock option issuances, and (vi) other employee medical and benefits costs. For additional information on the Company's employee benefit plans, see Note 15, “Employee Benefit Plans.”

Foreign Currency Transactions
Foreign denominated assets and liabilities resulting from foreign currency transactions are valued using period end foreign exchange rates and the associated interest income or expense is determined using weighted average exchange rates for the period. The Company may enter into foreign currency derivatives to mitigate its exposure to changes in foreign exchange rates. The derivative contracts are accounted for at fair value on a recurring basis with any resulting gains and losses recorded in Noninterest income in the Consolidated Statements of Income.
Related Party Transactions
The Company periodically enters into transactions with certain of its executive officers, directors, affiliates, trusts, and/or other related parties in its ordinary course of business. ASC 850 requires disclosure of material related party transactions, other than certain compensation and other arrangements entered into in the normal course of business. The Company has included information related to its relationships with VIEs and employee benefit plan arrangements in its Notes to the Consolidated Financial Statements in this Form 10-K.

Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value. The Company prioritizes inputs used in valuation techniques based on the fair value hierarchy discussed in Note 18, “Fair Value Election and Measurement.”
When measuring assets and liabilities at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. Assets and liabilities that are required to be measured at fair value on a recurring basis include trading securities, securities AFS, and derivative instruments. Assets and liabilities that the Company has elected to measure at fair value on a recurring basis include certain MSRs, LHFS, LHFI, trading loans, brokered time deposits, and issuances of fixed rate debt. Other assets and liabilities are measured at fair value on a non-recurring basis, such as when assets are evaluated for impairment, the basis of accounting is LOCOM, or for disclosure purposes. Examples of these nonrecurring fair value measurements include certain LHFS and LHFI, OREO, certain cost or equity method investments, and intangible and long-lived assets. For additional information on the Company’s valuation of assets and liabilities held at fair value, see Note 18, “Fair Value Election and Measurement.”


Recently Issued Accounting Pronouncements
The following table summarizes ASUs issued by the FASB that were not yet adopted (or only partially adopted previously) as of December 31, 2017, that could have a material effect on the Company's financial statements:
Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted (or partially adopted previously)
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities
The ASU amends ASC Topic 825, Financial Instruments-Overall, and addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions require most investments in equity securities to be measured at fair value through net income, unless they qualify for a measurement alternative, and require fair value changes arising from changes in instrument-specific credit risk for financial liabilities that are measured under the fair value option to be recognized in other comprehensive income. With the exception of disclosure requirements and the application of the measurement alternative for certain equity investments that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.
January 1, 2018

Early adoption is permitted beginning January 1, 2016 or 2017 for the provision related to changes in instrument-specific credit risk for financial liabilities under the FVO.

The Company early adopted the provision related to changes in instrument-specific credit risk beginning January 1, 2016, which resulted in an immaterial cumulative effect adjustment from Retained earnings to AOCI. See Note 1, “Significant Accounting Policies,” to the Company's 2016 Annual Report on Form 10-K for additional information regarding the early adoption of this provision.

Effective as of January 1, 2018, an immaterial amount of equity securities previously classified as Securities AFS were reclassified to Other assets, as the AFS classification is no longer permitted for equity securities under this ASU. The remaining provisions of this ASU did not have a material impact on the Company's Consolidated Financial Statements and related disclosures upon adoption. However, for any investments for which we elect the measurement alternative, to the extent there is an observable price change in transactions occurring subsequent to January 1, 2018 for identical or similar instruments of the same issuer, these investments will have to be re-measured through net income based on the observed transaction price, which may result in a material impact to the Company's Consolidated Statements of Income.
 
Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted (or partially adopted previously) (continued)
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
The ASU amends ASC Topic 230, Statement of Cash Flows, to clarify the classification of certain cash receipts and payments within the Company's Consolidated Statements of Cash Flow. These items include: cash payments for debt prepayment or debt extinguishment costs; cash outflows for the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; and beneficial interests acquired in securitization transactions. The ASU also clarifies that when no specific U.S. GAAP guidance exists and the source of the cash flows are not separately identifiable, the predominant source of cash flow should be used to determine the classification for the item. The ASU must be adopted on a retrospective basis.

January 1, 2018
Effective as of January 1, 2018, the adoption date, the Company will change the presentation of certain cash payments and receipts within its Consolidated Statements of Cash Flows. Specifically, the Company will reclassify approximately $3 million and $17 million of proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, from operating activities to investing activities for the years ended December 31, 2017 and 2016, respectively. The Company will also reclassify approximately $127 million and $202 million of cash payments related to premiums paid for corporate-owned life insurance policies, including bank-owned life insurance policies, from operating activities to investing activities for the years ended December 31, 2017 and 2016, respectively. Lastly, for contingent consideration payments made more than three months after a business combination, the Company will reclassify the portion of the cash payment up to the acquisition date fair value of the contingent consideration as a financing activity and any amount paid in excess of the acquisition date fair value as an operating activity. For the year ended December 31, 2016, the Company will reclassify approximately $13 million from investing activities to financing activities and will reclassify approximately $10 million from investing activities to operating activities. For the year ended December 31, 2017, there were no contingent consideration payments made.

These changes will be reflected for all periods presented in the Company's Consolidated Statements of Cash Flows beginning with its first quarter of 2018 Quarterly Report on Form 10-Q.

ASU 2014-09, Revenue from Contracts with Customers

ASU 2015-14, Deferral of the Effective Date

ASU 2016-08, Principal versus Agent Considerations

ASU 2016-10, Identifying Performance Obligations and Licensing

ASU 2016-12, Narrow-Scope Improvements and Practical Expedients

ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers

These ASUs comprise ASC Topic 606, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the ASC. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These ASUs may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts, with remaining performance obligations as of the effective date.
January 1, 2018
The Company completed its evaluation of the anticipated effects that these ASUs will have on its Consolidated Financial Statements and related disclosures. The Company conducted a comprehensive scoping exercise to determine the revenue streams that are in the scope of these updates. Results indicate that certain noninterest income financial statement line items, including service charges on deposit accounts, card fees, other charges and fees, investment banking income, trust and investment management income, retail investment services, and other noninterest income, contain revenue streams that are within the scope of these updates.

The Company adopted these ASUs on January 1, 2018 using the modified retrospective method of adoption. The adoption resulted in an immaterial cumulative effect adjustment to the opening balance of retained earnings. Additionally, there will be prospective changes to the presentation of certain types of revenue and expenses, such as underwriting revenue and expenses within investment banking income, which will be shown on a gross basis, and to certain types of cash promotions and card network expenses, which will be reclassified from noninterest expense to service charges on deposit accounts and card fees, respectively. The net quantitative impact of these presentation changes to noninterest income and noninterest expense is immaterial and will not affect net income. The Company is in the process of completing the required quantitative and qualitative disclosures, which will be included in its first quarter of 2018 Quarterly Report on Form 10-Q.

Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted (or partially adopted previously) (continued)
ASU 2017-09, Stock Compensation (Topic 718): Scope of Modification Accounting
This ASU amends ASC Topic 718, Stock Compensation, to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting per ASC Topic 718, Stock Compensation. The amendments clarify that modification accounting only applies to an entity if the fair value, vesting conditions, or classification of the award changes as a result of changes in the terms or conditions of a share-based payment award. The ASU should be applied prospectively to awards modified on or after the adoption date.

January 1, 2018
The Company adopted this ASU on January 1, 2018 and upon adoption, the ASU did not impact the Company's Consolidated Financial Statements and related disclosures.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
The ASU amends ASC Topic 815, Derivatives and Hedging, to simplify the requirements for hedge accounting. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges. These changes expand the types of risk management strategies eligible for hedge accounting. The ASU also permits entities to qualitatively assert that a hedging relationship was and continues to be highly effective. New incremental disclosures are also required for reporting periods subsequent to the date of adoption. All transition requirements and elections should be applied to hedging relationships existing on the date of adoption using a modified retrospective approach.

January 1, 2019

Early adoption is permitted.
The Company early adopted this ASU beginning January 1, 2018 and modified its measurement methodology for certain hedged items designated under fair value hedge relationships. The Company elected to perform its subsequent assessments of hedge effectiveness using a qualitative, rather than a quantitative, approach. The adoption resulted in an immaterial cumulative effect adjustment to the opening balance of Retained earnings and a basis adjustment to the related hedged items. The Company is in the process of developing the required disclosures, which will be included in its first quarter 2018 Quarterly Report on Form 10-Q.
ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from AOCI

This ASU amends ASC Topic 220, Income Statement - Reporting Comprehensive Income to allow for a reclassification from AOCI to Retained earnings for the stranded tax effects resulting from the 2017 Tax Act. The amount of the reclassification would be the difference between the historical federal corporate income tax rate and the newly enacted 21 percent federal corporate income tax rate. Consequently, the amendments in this ASU would eliminate the stranded tax effects resulting from the change in the federal corporate income tax rate in the 2017 Tax Act. The Company may apply this ASU at the beginning of the period of adoption or retrospectively to all periods in which the 2017 Tax Act is enacted.


January 1, 2019

Early adoption is permitted.
The Company plans on early adopting this ASU as of January 1, 2018. Upon adoption of this ASU, the Company will elect to reclassify approximately $154 million of stranded tax effects relating to securities AFS, derivative instruments, credit risk on long-term debt, and employee benefit plans from AOCI to Retained earnings.

ASU 2016-02, Leases
The ASU creates ASC Topic 842, Leases, which supersedes ASC Topic 840, Leases. ASC Topic 842 requires lessees to recognize right-of-use assets and associated liabilities that arise from leases, with the exception of short-term leases. The ASU does not make significant changes to lessor accounting; however, there were certain improvements made to align lessor accounting with the lessee accounting model and ASC Topic 606, Revenue from Contracts with Customers. There are several new qualitative and quantitative disclosures required. Upon transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.

January 1, 2019

Early adoption is permitted.
The Company has formed a cross-functional team to oversee the implementation of this ASU. The Company's implementation efforts are ongoing, including the review of its lease portfolios and related lease accounting policies, the review of its service contracts for embedded leases, and the deployment of a new lease software solution. The Company's adoption of this ASU will result in an increase in right-of-use assets and associated lease liabilities, arising from operating leases in which the Company is the lessee, on its Consolidated Balance Sheets.

The amount of the right-of-use assets and associated lease liabilities recorded upon adoption will be based primarily on the present value of unpaid future minimum lease payments, the amount of which will depend on the population of leases in effect at the date of adoption. At December 31, 2017, the Company’s estimate of right-of-use assets and lease liabilities that would be recorded on its Consolidated Balance Sheets upon adoption is in excess of $1 billion. The Company does not expect this ASU to have a material impact on its Consolidated Statements of Income subsequent to adoption.

Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted (or partially adopted previously) (continued)
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
The ASU adds ASC Topic 326, Financial Instruments-Credit Losses, to replace the incurred loss impairment methodology with a current expected credit loss methodology for financial instruments measured at amortized cost and other commitments to extend credit. For this purpose, expected credit losses reflect losses over the remaining contractual life of an asset, considering the effect of voluntary prepayments and considering available information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The resulting allowance for credit losses is deducted from the amortized cost basis of the financial assets to reflect the net amount expected to be collected on the financial assets. Additional quantitative and qualitative disclosures are required upon adoption. The change to the allowance for credit losses at the time of the adoption will be made with a cumulative effect adjustment to Retained earnings.

The current expected credit loss model does not apply to AFS debt securities; however, the ASU requires entities to record an allowance when recognizing credit losses for AFS securities, rather than recording a direct write-down of the carrying amount.

January 1, 2020

Early adoption is permitted beginning January 1, 2019.
The Company has formed a cross-functional team to oversee the implementation of this ASU and has identified the changes necessary to its credit loss estimation methodologies in order to comply with the new accounting standard requirements. Substantial progress has been made to date on implementing these changes, including the development of models, updates to technology systems, and the documentation of accounting policy decisions. Additionally, the Company is evaluating the impact that this ASU will have on its Consolidated Financial Statements and related disclosures, and the Company currently anticipates that an increase to the allowance for credit losses will be recognized upon adoption to provide for the expected credit losses over the estimated life of the financial assets. However, since the magnitude of the anticipated increase in the allowance for credit losses will be impacted by economic conditions and trends in the Company’s portfolio at the time of adoption, the quantitative impact cannot yet be reasonably estimated.

ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
The ASU amends ASC Topic 350, Intangibles - Goodwill and Other, to simplify the subsequent measurement of goodwill, by eliminating Step 2 from the goodwill impairment test. The amendments require an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Entities should recognize an impairment charge for the amount by which a reporting unit's carrying amount exceeds its fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU must be applied on a prospective basis.

January 1, 2020

Early adoption is permitted.
Based on the Company's most recent annual goodwill impairment test performed as of October 1, 2017, there were no reporting units for which the carrying amount of the reporting unit exceeded its fair value; therefore, this ASU would not currently have an impact on the Company's Consolidated Financial Statements and related disclosures. However, if upon adoption the carrying amount of a reporting unit exceeds its fair value, the Company would be required to recognize an impairment charge for the amount that the carrying value exceeds the fair value.
Acquisitions/Dispositions Acquisitions/Dispositions (Notes)
Mergers, Acquisitions and Dispositions Disclosures [Text Block]
NOTE 2 - ACQUISITIONS/DISPOSITIONS
During the years ended December 31, 2017, 2016, and 2015, the Company had the following notable acquisition and disposition:
(Dollars in millions)
Date
 
Consideration Received/(Paid)
 
Goodwill
 
Other Intangible Assets
 
Pre-tax Gain
2017
 
 
 
 
 
 
 
 
 
Sale of PAC
12/1/2017
 

$261

 

($7
)
 

$—

 

$107

2016
 
 
 
 
 
 
 
 
 
Acquisition of Pillar
12/15/2016
 

($197
)
 

$1

 

$13

1 

$—

1 Does not include $62 million of commercial mortgage servicing rights acquired.

Sale of PAC
On December 1, 2017, the Company completed the sale of PAC, its commercial lines insurance premium finance subsidiary with $1.3 billion in assets and $1.2 billion in liabilities, to IPFS Corporation. As a result, the Company received consideration of $261 million and recognized a pre-tax gain of $107 million in connection with the sale, net of transaction-related expenses.
The Company's results for the years ended December 31, 2017, 2016, and 2015 included the following related to PAC, excluding the gain on sale:
(Dollars in millions)
 
 
 
 
 
PAC Financial Information:
2017
 
2016
 
2015
Revenue

$56

 

$60

 

$59

Less: Expenses
31

 
27

 
22

Income before provision for income taxes

$25

 

$33

 

$37



For all periods presented, the financial results of PAC through the date of disposition, including the gain on sale, are reflected in the Company's Wholesale business segment.

Acquisition of Pillar
On December 15, 2016, the Company completed the acquisition of substantially all of the assets of the operating subsidiaries of Pillar Financial, LLC, a multi-family agency lending and servicing company with an originate-to-distribute focus that holds licenses with Fannie Mae, Freddie Mac, and the FHA. The acquired assets include Pillar's multi-family lending business, which is comprised of multi-family affordable housing, health care properties, senior housing, and manufactured housing specialty teams. Additionally, the transaction includes Cohen Financial's commercial real estate investor services business, which provides loan administration, advisory, and commercial mortgage brokerage services.
During the second quarter of 2017, the final settlement amount associated with working capital adjustments was reached and the purchase consideration of $197 million was finalized.

There were no other material acquisitions or dispositions during the three years ended December 31, 2017.
Federal Funds Sold and Securities Financing Activities
Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]
NOTE 3 - FEDERAL FUNDS SOLD AND SECURITIES FINANCING ACTIVITIES
Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell
Fed Funds sold and securities borrowed or purchased under agreements to resell were as follows:
(Dollars in millions)
December 31, 2017
 
December 31, 2016
Fed funds sold

$65

 

$58

Securities borrowed
298

 
270

Securities purchased under agreements to resell
1,175

 
979

Total Fed funds sold and securities borrowed or purchased under agreements to resell

$1,538

 

$1,307


Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which the securities will be subsequently resold, plus accrued interest. Securities borrowed are primarily collateralized by corporate securities. The Company borrows securities and purchases securities under agreements to resell as part of its securities financing activities. On the acquisition date of these securities, the Company and the related counterparty agree on the amount of collateral required to secure the principal amount loaned under these arrangements. The Company monitors collateral values daily and calls for additional collateral to be provided as warranted under the respective agreements. At December 31, 2017 and 2016, the total market value of collateral held was $1.5 billion and $1.3 billion, of which $177 million and $246 million was repledged, respectively.

Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase are accounted for as secured borrowings. The following table presents the Company’s related activity, by collateral type and remaining contractual maturity:
 
December 31, 2017
 
December 31, 2016
(Dollars in millions)
Overnight and Continuous
 
Up to 30 days
 
30-90 days
 
Total
 
Overnight and Continuous
 
Up to 30 days
 
30-90 days
 
Total
U.S. Treasury securities

$95

 

$—

 

$—

 

$95

 

$27

 

$—

 

$—

 

$27

Federal agency securities
101

 
15

 

 
116

 
288

 
24

 

 
312

MBS - agency
694

 
135

 

 
829

 
793

 
51

 

 
844

CP
19

 

 

 
19

 
49

 

 

 
49

Corporate and other debt securities
316

 
88

 
40

 
444

 
311

 
50

 
40

 
401

Total securities sold under agreements to repurchase

$1,225

 

$238

 

$40

 

$1,503

 

$1,468

 

$125

 

$40

 

$1,633



For these securities sold under agreements to repurchase, the Company would be obligated to provide additional collateral in the event of a significant decline in fair value of the collateral pledged. This risk is managed by monitoring the liquidity and credit quality of the collateral, as well as the maturity profile of the transactions.

Netting of Securities - Repurchase and Resell Agreements
The Company has various financial assets and financial liabilities that are subject to enforceable master netting agreements or similar agreements. The Company's derivatives that are subject to enforceable master netting agreements or similar agreements are discussed in Note 17, "Derivative Financial Instruments." The following table presents the Company's securities borrowed or purchased under agreements to resell and securities sold under agreements to repurchase that are subject to MRAs. Generally, MRAs require collateral to exceed the asset or liability recognized on the balance sheet. Transactions subject to these agreements are treated as collateralized financings, and those with a single counterparty are permitted to be presented net on the Company's Consolidated Balance Sheets, provided certain criteria are met that permit balance sheet netting. At December 31, 2017 and 2016, there were no such transactions subject to legally enforceable MRAs that were eligible for balance sheet netting.
The following table includes the amount of collateral pledged or received related to exposures subject to enforceable MRAs. While these agreements are typically over-collateralized, the amount of collateral presented in this table is limited to the amount of the related recognized asset or liability for each counterparty.
(Dollars in millions)
Gross
Amount
 
Amount
Offset
 
Net Amount
Presented in
Consolidated
Balance Sheets
 
Held/Pledged Financial
Instruments
 
Net
Amount
December 31, 2017
 
 
 
 
 
 
 
 
 
Financial assets:
 
 
 
 
 
 
 
 
 
Securities borrowed or purchased under agreements to resell

$1,473

 

$—

 

$1,473

1 

$1,462

 

$11

Financial liabilities:
 
 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase
1,503

 

 
1,503

 
1,503

 

 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
Financial assets:
 
 
 
 
 
 
 
 
 
Securities borrowed or purchased under agreements to resell

$1,249

 

$—

 

$1,249

1 

$1,241

 

$8

Financial liabilities:
 
 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase
1,633

 

 
1,633

 
1,633

 


1 Excludes $65 million and $58 million of Fed Funds sold, which are not subject to a master netting agreement at December 31, 2017 and 2016, respectively.

Trading Assets and Liabilities and Derivatives Trading Assets and Liabilities and Derivatives
Trading Assets and Liabilities and Derivatives [Text Block]
NOTE 4 - TRADING ASSETS AND LIABILITIES AND DERIVATIVE INSTRUMENTS

The fair values of the components of trading assets and liabilities and derivative instruments are presented in the following table:
(Dollars in millions)
December 31, 2017
 
December 31, 2016
Trading Assets and Derivative Instruments:
 
 
 
U.S. Treasury securities

$157

 

$539

Federal agency securities
395

 
480

U.S. states and political subdivisions
61

 
134

MBS - agency
700

 
567

CLO securities

 
1

Corporate and other debt securities
655

 
656

CP
118

 
140

Equity securities
56

 
49

Derivative instruments 1
802

 
984

Trading loans 2
2,149

 
2,517

Total trading assets and derivative instruments

$5,093

 

$6,067

 
 
 
 
Trading Liabilities and Derivative Instruments:
 
 
 
U.S. Treasury securities

$577

 

$697

MBS - agency

 
1

Corporate and other debt securities
289

 
255

Equity securities
9

 

Derivative instruments 1
408

 
398

Total trading liabilities and derivative instruments

$1,283

 

$1,351

1 Amounts include the impact of offsetting cash collateral received from and paid to the same derivative counterparties, and the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement or similar agreement exists.
2 Includes loans related to TRS.

Various trading and derivative instruments are used as part of the Company’s overall balance sheet management strategies and to support client requirements executed through the Bank and/or STRH, a broker/dealer subsidiary of the Company. The Company manages the potential market volatility associated with trading instruments by using appropriate risk management strategies. The size, volume, and nature of the trading products and derivative instruments can vary based on economic conditions as well as client-specific and Company-specific asset or liability positions.
Product offerings to clients include debt securities, loans traded in the secondary market, equity securities, derivative contracts, and other similar financial instruments. Other trading-related activities include acting as a market maker for certain debt and equity security transactions, derivative instrument transactions, and foreign exchange transactions. The Company also uses derivatives to manage its interest rate and market risk from non-trading activities. The Company has policies and procedures to manage market risk associated with client trading and non-trading activities, and assumes a limited degree of market risk by managing the size and nature of its exposure. For valuation assumptions and additional information related to the Company's trading products and derivative instruments, see Note 17, “Derivative Financial Instruments,” and the “Trading Assets and Derivative Instruments and Securities Available for Sale” section of Note 18, “Fair Value Election and Measurement.”
Pledged trading assets are presented in the following table:
(Dollars in millions)
December 31, 2017
 
December 31, 2016
Pledged trading assets to secure repurchase agreements 1

$1,016

 

$968

Pledged trading assets to secure certain derivative agreements
72

 
471

Pledged trading assets to secure other arrangements
41

 
40

1 Repurchase agreements secured by collateral totaled $975 million and $928 million at December 31, 2017 and 2016, respectively.
Securities Available for Sale
Securities Available for Sale
NOTE 5SECURITIES AVAILABLE FOR SALE
Securities Portfolio Composition
 
December 31, 2017
(Dollars in millions)
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
U.S. Treasury securities

$4,361

 

$2

 

$32

 

$4,331

Federal agency securities
257

 
3

 
1

 
259

U.S. states and political subdivisions
618

 
7

 
8

 
617

MBS - agency residential
22,616

 
222

 
134

 
22,704

MBS - agency commercial
2,121

 
3

 
38

 
2,086

MBS - non-agency residential
55

 
4

 

 
59

MBS - non-agency commercial
862

 
7

 
3

 
866

ABS
6

 
2

 

 
8

Corporate and other debt securities
17

 

 

 
17

Other equity securities 1
472

 

 
3

 
469

Total securities AFS

$31,385

 

$250

 

$219

 

$31,416

 
 
 
 
 
 
 
 
 
December 31, 2016
(Dollars in millions)
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
U.S. Treasury securities

$5,486

 

$5

 

$86

 

$5,405

Federal agency securities
310

 
5

 
2

 
313

U.S. states and political subdivisions
279

 
5

 
5

 
279

MBS - agency residential
22,379

 
311

 
254

 
22,436

MBS - agency commercial
1,263

 
2

 
39

 
1,226

MBS - non-agency residential
71

 
3

 

 
74

MBS - non-agency commercial
257

 

 
5

 
252

ABS
8

 
2

 

 
10

Corporate and other debt securities
34

 
1

 

 
35

Other equity securities 1
642

 
1

 
1

 
642

Total securities AFS

$30,729

 

$335

 

$392

 

$30,672

1 At December 31, 2017, the fair value of other equity securities was comprised of the following: $15 million of FHLB of Atlanta stock, $403 million of Federal Reserve Bank of Atlanta stock, $49 million of mutual fund investments, and $2 million of other.
At December 31, 2016, the fair value of other equity securities was comprised of the following: $132 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $102 million of mutual fund investments, and $6 million of other.

The following table presents interest and dividends on securities AFS:
 
Year Ended December 31
(Dollars in millions)
2017
 
2016
 
2015
Taxable interest

$743

 

$630

 

$552

Tax-exempt interest
13

 
6

 
6

Dividends
18

 
15

 
35

Total interest and dividends on securities AFS

$774

 

$651

 

$593



Securities AFS pledged to secure public deposits, repurchase agreements, trusts, certain derivative agreements, and other funds had a fair value of $4.3 billion and $2.0 billion at December 31, 2017 and 2016, respectively.
The following table presents the amortized cost, fair value, and weighted average yield of investments in debt securities AFS at December 31, 2017, by remaining contractual maturity, with the exception of MBS and ABS, which are based on estimated average life. Receipt of cash flows may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.
 
Distribution of Remaining Maturities
(Dollars in millions)
Due in 1 Year or Less
 
Due After 1 Year through 5 Years
 
Due After 5 Years through 10 Years
 
Due After 10 Years
 
Total
Amortized Cost:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities

$—

 

$2,322

 

$2,039

 

$—

 

$4,361

Federal agency securities
121

 
46

 
4

 
86

 
257

U.S. states and political subdivisions
6

 
49

 
149

 
414

 
618

MBS - agency residential
2,686

 
7,937

 
11,781

 
212

 
22,616

MBS - agency commercial

 
315

 
1,547

 
259

 
2,121

MBS - non-agency residential

 
55

 

 

 
55

MBS - non-agency commercial

 
12

 
813

 
37

 
862

ABS

 
6

 

 

 
6

Corporate and other debt securities
7

 
10

 

 

 
17

Total debt securities AFS

$2,820

 

$10,752

 

$16,333

 

$1,008

 

$30,913

Fair Value:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities

$—

 

$2,305

 

$2,026

 

$—

 

$4,331

Federal agency securities
123

 
47

 
4

 
85

 
259

U.S. states and political subdivisions
6

 
52

 
153

 
406

 
617

MBS - agency residential
2,748

 
7,980

 
11,763

 
213

 
22,704

MBS - agency commercial

 
308

 
1,525

 
253

 
2,086

MBS - non-agency residential

 
59

 

 

 
59

MBS - non-agency commercial

 
12

 
816

 
38

 
866

ABS

 
8

 

 

 
8

Corporate and other debt securities
7

 
10

 

 

 
17

Total debt securities AFS

$2,884

 

$10,781

 

$16,287

 

$995

 

$30,947

 Weighted average yield 1
3.36
%
 
2.34
%
 
2.81
%
 
3.23
%
 
2.71
%
1 Weighted average yields are based on amortized cost and presented on an FTE basis.

Securities AFS in an Unrealized Loss Position
The Company held certain investment securities AFS where amortized cost exceeded fair value, resulting in unrealized loss positions. Market changes in interest rates and credit spreads may result in temporary unrealized losses as the market prices of securities fluctuate. At December 31, 2017, the Company did not intend to sell these securities nor was it more-likely-than-not that the Company would be required to sell these securities before their anticipated recovery or maturity. The Company reviewed its portfolio for OTTI in accordance with the accounting policies described in Note 1, "Significant Accounting Policies."

Securities AFS in an unrealized loss position at period end are presented in the following tables:
 
December 31, 2017
 
Less than twelve months
 
Twelve months or longer
 
Total
(Dollars in millions)
Fair
Value
 
Unrealized
Losses
2
 
Fair
Value
 
Unrealized
Losses
2
 
Fair
Value
 
Unrealized
Losses
2
Temporarily impaired securities AFS:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities

$1,993

 

$12

 

$841