SUNTRUST BANKS INC, 10-Q filed on 5/4/2017
Quarterly Report
Document and Entity Information (USD $)
3 Months Ended
Mar. 31, 2017
Apr. 28, 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-Q 
 
 
Document Period End Date
Mar. 31, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
Q1 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
483,476,213 
 
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 
Consolidated Statements of Income (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Interest Income
 
 
Interest and fees on loans
$ 1,289 
$ 1,203 
Interest and fees on loans held for sale
24 
19 
Interest and Dividend Income, Securities, Available-for-sale
187 
163 
Trading account interest and other
28 
26 
Total interest income
1,528 
1,411 
Interest Expense
 
 
Interest on deposits
80 
59 
Interest Expense, Long-term Debt
70 
59 
Interest on other borrowings
12 
11 
Total interest expense
162 
129 
Net, interest income
1,366 
1,282 
Provision for Loan, Lease, and Other Losses
119 1
101 2
Interest Income (Expense), after Provision for Loan Loss
1,247 
1,181 
Noninterest Income
 
 
Service charges on deposit accounts
148 
153 
Fees and Commissions, Other
95 
93 
Fees and Commissions, Credit and Debit Cards
82 
78 
Investment Banking Revenue
167 
98 
Trading Gain (Loss)
51 
55 
Fees and Commissions, Fiduciary and Trust Activities
75 
75 
Investment Advisory, Management and Administrative Fees
68 
69 
Fees and Commissions, Mortgage Banking
53 
60 
Servicing Fees, Net
(58)
(62)
commercial real estate related income
20 3
17 3
Gain (Loss) on Sale of Securities, Net
Noninterest Income, Other Operating Income
30 3
21 3
Total noninterest income
847 
781 
Noninterest Expense
 
 
Employee compensation
717 
639 
Other Labor-related Expenses
135 
135 
Outside processing and software
205 
198 
Net occupancy expense
92 
85 
Equipment Expense
39 
40 
Marketing and Advertising Expense
42 
44 
Federal Deposit Insurance Corporation Premium Expense
48 
36 
Operating losses
32 
24 
Amortization
13 
10 
Other Noninterest Expense
142 
107 
Noninterest Expense
1,465 
1,318 
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest
629 
644 
Income Tax Expense (Benefit)
159 
195 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
470 
449 
Net Income (Loss) Attributable to Noncontrolling Interest
Net Income (Loss) Attributable to Parent
468 
447 
Net Income (Loss) Available to Common Stockholders, Basic
$ 451 
$ 430 
Weighted Average Number of Shares Outstanding, Basic
490,091,000 
505,482,000 
Weighted Average Number of Shares Outstanding, Diluted
496,000,000 
510,000,000 
Common Stock, Dividends, Per Share, Declared
$ 0.26 
$ 0.24 
Earnings Per Share, Basic
$ 0.92 
$ 0.85 
Earnings Per Share, Diluted
$ 0.91 
$ 0.84 
Consolidated Statements of Comprehensive Income Consolidated Statement of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
 
 
Net Income (Loss) Attributable to Parent
$ 468 
$ 447 
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
279 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax
(42)
150 
Other Comprehensive Income (Loss), Brokered Time Deposits, Net of Tax
Other Comprehensive Income (Loss), Long Term Debt, Adjustment, Net of Tax
(1)1
(2)1
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax
(5)
59 
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent
(46)
486 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ 422 
$ 933 
Consolidated Statements of Comprehensive Income Consolidated Statement of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
 
 
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax
$ 1 
$ 165 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax
(24)
89 
Other Comprehensive Income (Loss), Long Term Debt, Adjustment, Tax
(1)
(1)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Tax
$ (1)
$ 35 
Consolidated Balance Sheets (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Assets
 
 
Cash and Due from Banks
$ 6,957 
$ 5,091 
Federal Funds Sold and Securities Purchased under Agreements to Resell
1,292 
1,307 
Interest-bearing Deposits in Banks and Other Financial Institutions
25 
25 
Cash and cash equivalents
8,274 
6,423 
Trading assets
6,007 1
6,067 1
Available-for-sale Securities
31,127 2
30,672 2
Loans Held for Sale
2,109 3
4,169 3
Loans held for investment
143,529 4
143,298 4
Loans and Leases Receivable, Allowance
(1,714)
(1,709)
Net loans
141,815 
141,589 
Property, Plant and Equipment, Net
1,543 
1,556 
Goodwill
6,338 
6,337 
Intangible Assets, Net (Excluding Goodwill)
1,729 
1,657 
Other Assets
6,700 
6,405 
Total assets
205,642 
204,875 
Liabilities and Shareholders' Equity
 
 
Noninterest-bearing consumer and commercial deposits
43,437 
43,431 
Interest-bearing Deposit Liabilities
119,416 
116,967 
Total deposits
162,853 
160,398 
Funds purchased
1,037 
2,116 
Securities Sold under Agreements to Repurchase
1,704 
1,633 
Other Short-term Borrowings
1,955 
1,015 
Long-term Debt
10,496 5
11,748 5
Trading liabilities
1,225 
1,351 
Other Liabilities
2,888 
2,996 
Total liabilities
182,158 
181,257 
Preferred Stock, Value, Outstanding
1,225 
1,225 
Common Stock, Value, Outstanding
550 
550 
Additional Paid in Capital
8,966 
9,010 
Retained earnings
16,322 
16,000 
Treasury stock, at cost, and other
(2,712)6
(2,346)6
Accumulated Other Comprehensive Income (Loss), Net of Tax
(867)
(821)
Total shareholders' equity
23,484 
23,618 
Liabilities and Equity
205,642 
204,875 
Common Stock, Shares, Outstanding
485,712 7
491,188 7
Common shares authorized
750,000 
750,000 
Preferred Stock, Shares Outstanding
12 
12 
Preferred Stock, Shares Authorized
50,000 
50,000 
Treasury shares of common stock
64,301 
58,738 
Treasury Stock and Other
 
 
Liabilities and Shareholders' Equity
 
 
Treasury stock, at cost, and other
(2,812)
 
Total shareholders' equity
(2,712)8
(2,346)8
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets
 
 
Loans held for investment
201 
211 
Liabilities and Shareholders' Equity
 
 
Long-term Debt
$ 214 
$ 222 
Restricted Stock [Member]
 
 
Liabilities and Shareholders' Equity
 
 
Common Stock, Shares, Outstanding
11 
11 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Loans Held-for-sale, Fair Value Disclosure
$ 1,819 
$ 3,540 
Loans Receivable, Fair Value Disclosure
221 
222 
Servicing Asset at Fair Value, Amount
1,645 
1,572 
Long-term Debt, Fair Value
771 
963 
Common stock, par value
$ 1.00 
$ 1.00 
Loans and Leases Receivable, Gross
143,529 1
143,298 1
Long-term Debt
10,496 2
11,748 2
Common Stock, Shares, Outstanding
485,712 3
491,188 3
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Loans and Leases Receivable, Gross
201 
211 
Long-term Debt
214 
222 
Treasury Stock and Other
 
 
Stockholders' Equity Attributable to Noncontrolling Interest
101 
103 
Residential Portfolio Segment [Member]
 
 
Loans Receivable, Fair Value Disclosure
221 
222 
Loans and Leases Receivable, Gross
38,550 
38,990 
Restricted Stock [Member]
 
 
Common Stock, Shares, Outstanding
11 
11 
Trading Securities [Member]
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
1,229 
1,437 
Available-for-sale Securities [Member]
 
 
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value
100 
Brokered Time Deposits [Member]
 
 
Deposits, Fair Value Disclosure
$ 128 
$ 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, 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
 
 
505,000,000 
 
 
 
 
Cumulative effect of credit risk adjustment3
 
 
 
 
(5)2
Net Income (Loss) Attributable to Parent
447 
 
 
 
447 
 
 
Other Comprehensive Income (Loss), Net of Tax
486 
 
 
 
 
 
486 
Noncontrolling Interest, Period Increase (Decrease)
(7)
 
 
 
 
(7)1
 
Dividends, Common Stock, Cash
(121)
 
 
 
(121)
 
 
Dividends, Preferred Stock, Cash4
(17)
 
 
 
(17)
 
 
Treasury Stock, Shares, Acquired
 
 
(4,000,000)
 
 
 
 
Treasury Stock, Value, Acquired, Cost Method
(151)
 
 
 
 
(151)1
 
Payments for Repurchase of Warrants
(24)
 
 
(24)
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
 
 
 
 
 
 
Stock Issued During Period, Value, Stock Options Exercised
(1)
 
 
(3)
 
(2)1
 
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures
 
 
 
 
 
 
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures
 
 
(50)
(1)
53 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 Mar. 31, 2016
24,053 
1,225 
550 
9,017 
14,999 
(1,759)1
21 
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
485,712,000 5
 
486,000,000 
 
 
 
 
Net Income (Loss) Attributable to Parent
468 
 
 
 
468 
 
 
Other Comprehensive Income (Loss), Net of Tax
(46)
 
 
 
 
 
(46)
Noncontrolling Interest, Period Increase (Decrease)
(2)
 
 
 
 
(2)1
 
Dividends, Common Stock, Cash
(128)
 
 
 
(128)
 
 
Dividends, Preferred Stock, Cash4
(17)
 
 
 
(17)
 
 
Treasury Stock, Shares, Acquired
 
 
(7,000,000)
 
 
 
 
Treasury Stock, Value, Acquired, Cost Method
(414)
 
 
 
 
(414)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
(9)
 
 
(12)
 
(21)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
(4)
 
 
(32)
(1)
29 1
 
Total shareholders' equity at Mar. 31, 2017
$ 23,484 
$ 1,225 
$ 550 
$ 8,966 
$ 16,322 
$ (2,712)1
$ (867)
Consolidated Statements of Shareholders' Equity (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Treasury Stock, Value
$ (2,712)1
 
Common stock dividends, per share
$ 0.26 
$ 0.24 
Treasury Stock and Other
 
 
Treasury Stock, Value
(2,812)
(1,859)
Deferred Compensation Equity
(1)
(1)
Stockholders' Equity Attributable to Noncontrolling Interest
$ 101 
$ 101 
Series A Preferred Stock [Member]
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 1,000 
$ 1,011 
Series B Preferred Stock [Member]
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 1,000 
$ 1,011 
Series E Preferred Stock [Member]
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 1,469 
$ 1,469 
Series F Preferred Stock [Member] |
Additional Paid-in Capital [Member]
 
 
Preferred Stock, Dividends, Per Share, Cash Paid
$ 1,406 
$ 1,406 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cash Flows from Operating Activities:
 
 
Net Cash Provided by (Used in) Operating Activities, Continuing Operations
$ 2,098 
$ (197)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
470 
449 
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
 
 
Depreciation, Amortization and Accretion, Net
179 
171 
Payments to Acquire Mortgage Servicing Rights (MSR)
(101)
(46)
Provisions For Credit Losses And Foreclosed Properties
121 
103 
Stock Option Compensation And Amortization Of Restricted Stock Compensation
58 
25 
Gain (Loss) on Sale of Securities, Net
Gain (Loss) on Sale of Loans and Leases
(6)
(84)
Net decrease/(increase) in loans held for sale
2,056 
(4)
Increase (Decrease) in Trading Securities
(8)
(689)
Net (increase)/decrease in other assets
(387)1
146 1
Increase (Decrease) in Other Operating Liabilities
(284)1
(268)1
Cash Flows from Investing Activities:
 
 
Net Cash Provided by (Used in) Investing Activities, Continuing Operations
(819)
(3,459)
Proceeds from Maturities, Prepayments and Calls of Available-for-sale Securities
993 
1,057 
Purchases of securities available for sale
(1,450)
(1,008)
Proceeds from (payments for) Originations and Purchases of Loans Held-for-investment
(492)
(3,438)
Proceeds from sales of loans
118 
18 
Payments for (Proceeds from) Mortgage Servicing Rights
(75)
Capital expenditures
(43)
(24)
Payments related to acquisitions, including contingent consideration
(23)
Proceeds from Sale of Other Real Estate
55 
34 
Cash Flows from Financing Activities:
 
 
Net Cash Provided by (Used in) Financing Activities, Continuing Operations
572 
2,384 
Net (decrease)/increase in total deposits
2,455 
2,331 
Net increase/(decrease) in funds purchased, securities sold under agreements to repurchase, and other short-term borrowings
(68)
317 
Proceeds from Issuance of Long-term Debt
1,340 
1,105 
Repayment of long-term debt
(2,576)
(1,019)
Payments for Repurchase of Common Stock
(414)
(151)
Payments for Repurchase of Warrants
(24)
Common and preferred dividends paid
(138)
(130)
Proceeds from the exercise of stock options
1
1
Payments Related to Tax Withholding for Share-based Compensation
(36)1
(46)1
Cash and Cash Equivalents, Period Increase (Decrease)
1,851 
(1,272)
Cash and cash equivalents
6,423 
5,599 
Cash and cash equivalents
8,274 
4,327 
Supplemental Disclosures:
 
 
Transfer of Loans Held-for-sale to Portfolio Loans
Transfer of Portfolio Loans and Leases to Held-for-sale
60 
55 
Transfer to Other Real Estate
15 
16 
Non-cash impact of debt acquired by purchaser in leverage lease sale
$ 0 
$ 26 
Significant Accounting Policies
Significant Accounting Policies [Text Block]
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The unaudited Consolidated Financial Statements have been prepared in accordance with U.S. GAAP to present interim financial statement information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete, consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made.
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.
These interim Consolidated Financial Statements should be read in conjunction with the Company’s 2016 Annual Report on Form 10-K. Other than the recently issued accounting pronouncements discussed in this section, there have been no significant changes to the Company’s accounting policies, as disclosed in the 2016 Annual Report on Form 10-K, that could have a material effect on the Company's financial statements.
The Company evaluated events that occurred between March 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-Q, that would require recognition in the Company's Consolidated Financial Statements or disclosure in the accompanying Notes.

Recently Issued Accounting Pronouncements
The following table summarizes ASUs recently issued by the FASB 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) Adopted in 2017 (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 investments in equity securities to be measured at fair value through net income, unless they qualify for a practicability exception, 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 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 18, "Accumulated Other Comprehensive (Loss)/Income" for additional information. The Company is evaluating the impact of the remaining provisions of this ASU on the Consolidated Financial Statements and related disclosures; however, the impact is not expected to be material.
Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted
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 supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the 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. The 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

Early adoption is permitted beginning January 1, 2017.
The Company continues to evaluate the anticipated effects of these ASUs on the Consolidated Financial Statements and related disclosures. The Company has conducted a comprehensive scoping exercise to determine the revenue streams that are in the scope of these updates. Preliminary 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, commercial real estate related income, and other noninterest income, contain revenue streams that are in scope of these updates. Preliminary analyses indicate that there will be a change to gross presentation of certain types of revenue and expenses within investment banking income, such as underwriting revenue and expenses; the materiality of these changes is still being assessed. Other areas are still being evaluated, such as card interchange fees, card rewards programs, and service charges on deposit accounts. The Company is in the process of developing additional quantitative and qualitative disclosures that will be required upon adoption of the new ASUs. The Company plans to adopt the standards beginning January 1, 2018 and expects to use the modified retrospective method of adoption.

ASU 2016-02, Leases
The ASU creates ASC Topic 842, Leases, and supersedes Topic 840, Leases. 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 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 adoption of this ASU will result in an increase to the Consolidated Balance Sheets for right-of-use assets and associated lease liabilities for operating leases in which the Company is the lessee. The Company is evaluating the significance and other effects of adoption on the Consolidated Financial Statements and related disclosures.
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
The ASU amends ASC Topic 326, Financial Instruments-Credit Losses, to replace the incurred loss impairment methodology with a CECL 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 reflects the portion of the amortized cost basis that the entity does not expect to collect. Additional quantitative and qualitative disclosures are required upon adoption.

The CECL 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 it has begun to assess the required changes to its credit loss estimation methodologies. The Company is evaluating the impact 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, 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.

ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business
The ASU amends ASC Topic 805, Business Combinations, to provide a more robust framework to use in determining when a set of assets and activities meets the definition of a business. The amendment indicates that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of gross assets acquired does not represent a business. Further, a set of gross assets acquired cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create an output. The ASU should be applied on a prospective basis.

January 1, 2018

Early adoption is permitted.
This ASU will not impact the Consolidated Financial Statements and related disclosures until an asset acquisition or business combination occurs that requires an analysis to determine if the acquired assets are a business under the new guidance.
Standard
Description
Required Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Standard(s) Not Yet Adopted (continued)
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 should be applied on a prospective basis.
January 1, 2020

Early adoption is permitted.
Based on the Company's most recent annual impairment test, there were no reporting units for which the carrying amount of the reporting unit exceeded its fair value; therefore, this ASU does 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 impacted by the amount of impairment recognized.

ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

The ASU amends ASC Topic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, to clarify the scope of the Topic by clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.

January 1, 2018

Early adoption is permitted beginning January 1, 2017.
The Company is evaluating the impact this ASU will have on its Consolidated Financial Statements and related disclosures.
Acquisitions/Dispositions Acquisitions/Dispositions (Notes)
Mergers, Acquisitions and Dispositions Disclosures [Text Block]
NOTE 2 - ACQUISITIONS/DISPOSITIONS
During the three months ended March 31, 2017 and 2016, the Company had no material acquisitions or dispositions.

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.
The Company agreed to pay $197 million in cash and incurred an immaterial amount of acquisition-related costs for the acquisition. The acquisition of Pillar was accounted for using the acquisition method of accounting. The Company performed a preliminary allocation of the purchase price to the underlying assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Refer to the Company's 2016 Annual Report on Form 10-K for additional information.
During the three months ended March 31, 2017, the Company finalized its valuation of assets acquired and liabilities assumed at the date of acquisition, and revised the preliminary purchase price allocation accordingly. The following table presents the revised purchase price allocation at March 31, 2017, which included a $1 million reduction to other intangible assets, resulting in the recognition of $1 million of goodwill.
(Dollars in millions)
 
March 31, 2017
Consideration
 

$197

Revised Pillar purchase price allocation to:
 
 
Cash and cash equivalents
 

$9

LHFI
 
38

LHFS
 
182

Commercial mortgage servicing rights
 
62

Other intangible assets
 
13

Other assets
 
8

Other short-term borrowings
 
(100
)
Other liabilities
 
(16
)
Identified net assets acquired at fair value
 

$196

 
 
 
Goodwill
 

$1


At the date of acquisition, the UPB of LHFI and LHFS acquired were $38 million and $180 million, respectively, and the related contractual cash flows not expected to be collected were immaterial. Additionally, intangible assets acquired included $62 million of commercial mortgage servicing rights and $13 million related mainly to agency licenses. See Note 8, "Goodwill and Other Intangible Assets," for additional information regarding the identified intangible assets acquired.
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.
Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell
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)
March 31, 2017
 
December 31, 2016
Fed funds sold

$18

 

$58

Securities borrowed
362

 
270

Securities purchased under agreements to resell
912

 
979

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

$1,292

 

$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 both March 31, 2017 and December 31, 2016, the total market value of collateral held was $1.3 billion, of which $234 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:
 
March 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

$125

 

$—

 

$—

 

$125

 

$27

 

$—

 

$—

 

$27

Federal agency securities
112

 
25

 

 
137

 
288

 
24

 

 
312

MBS - agency
861

 
124

 

 
985

 
793

 
51

 

 
844

CP
82

 

 

 
82

 
49

 

 

 
49

Corporate and other debt securities
285

 
50

 
40

 
375

 
311

 
50

 
40

 
401

Total securities sold under agreements to repurchase

$1,465

 

$199

 

$40

 

$1,704

 

$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 14, "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 March 31, 2017 and December 31, 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
March 31, 2017
 
 
 
 
 
 
 
 
 
Financial assets:
 
 
 
 
 
 
 
 
 
Securities borrowed or purchased under agreements to resell

$1,274

 

$—

 

$1,274

1 

$1,262

 

$12

Financial liabilities:
 
 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase
1,704

 

 
1,704

 
1,704

 

 
 
 
 
 
 
 
 
 
 
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 $18 million and $58 million of Fed funds sold, which are not subject to a master netting agreement at March 31, 2017 and December 31, 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)
March 31, 2017
 
December 31, 2016
Trading Assets and Derivative Instruments:
 
 
 
U.S. Treasury securities

$450

 

$539

Federal agency securities
361

 
480

U.S. states and political subdivisions
55

 
134

MBS - agency
560

 
567

CLO securities

 
1

Corporate and other debt securities
590

 
656

CP
491

 
140

Equity securities
41

 
49

Derivative instruments 1
863

 
984

Trading loans 2
2,596

 
2,517

Total trading assets and derivative instruments

$6,007

 

$6,067

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

$528

 

$697

MBS - agency
5

 
1

Corporate and other debt securities
326

 
255

Equity securities
5

 

Derivative instruments 1
361

 
398

Total trading liabilities and derivative instruments

$1,225

 

$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 with 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 14, “Derivative Financial Instruments,” and the “Trading Assets and Derivative Instruments and Securities Available for Sale” section of Note 15, “Fair Value Election and Measurement.”
Pledged trading assets are presented in the following table:
(Dollars in millions)
March 31, 2017
 
December 31, 2016
Pledged trading assets to secure repurchase agreements 1

$958

 

$968

Pledged trading assets to secure certain derivative agreements
273

 
471

Pledged trading assets to secure other arrangements
40

 
40

1 Repurchase agreements secured by collateral totaled $918 million and $928 million at March 31, 2017 and December 31, 2016, respectively.
Securities Available for Sale
Securities Available for Sale
NOTE 5SECURITIES AVAILABLE FOR SALE
Securities Portfolio Composition
 
March 31, 2017
(Dollars in millions)
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
U.S. Treasury securities

$5,488

 

$5

 

$71

 

$5,422

Federal agency securities
297

 
6

 
1

 
302

U.S. states and political subdivisions
319

 
7

 
4

 
322

MBS - agency
23,791

 
291

 
287

 
23,795

MBS - non-agency residential
68

 
3

 

 
71

MBS - non-agency commercial
539

 
1

 
6

 
534

ABS
7

 
2

 

 
9

Corporate and other debt securities
34

 

 

 
34

Other equity securities 1
638

 
1

 
1

 
638

Total securities AFS

$31,181

 

$316

 

$370

 

$31,127

 
 
 
 
 
 
 
 
 
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
23,642

 
313

 
293

 
23,662

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 March 31, 2017, the fair value of other equity securities was comprised of the following: $111 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $119 million of mutual fund investments, and $6 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:
 
Three Months Ended March 31
(Dollars in millions)
2017
 
2016
Taxable interest

$180

 

$159

Tax-exempt interest
2

 
1

Dividends
5

 
3

Total interest and dividends on securities AFS

$187

 

$163



Securities AFS pledged to secure public deposits, repurchase agreements, trusts, certain derivative agreements, and other funds had a fair value of $3.3 billion and $2.0 billion at March 31, 2017 and December 31, 2016, respectively.

The following table presents the amortized cost, fair value, and weighted average yield of investments in debt securities AFS at March 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

$—

 

$2,345

 

$3,143

 

$—

 

$5,488

Federal agency securities
110

 
82

 
7

 
98

 
297

U.S. states and political subdivisions
9

 
32

 
117

 
161

 
319

MBS - agency
1,709

 
7,000

 
14,287

 
795

 
23,791

MBS - non-agency residential

 
68

 

 

 
68

MBS - non-agency commercial
20

 
12

 
492

 
15

 
539

ABS

 
7

 

 

 
7

Corporate and other debt securities
15

 
19

 

 

 
34

Total debt securities AFS

$1,863

 

$9,565

 

$18,046

 

$1,069

 

$30,543

Fair Value:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities

$—

 

$2,334

 

$3,088

 

$—

 

$5,422

Federal agency securities
112

 
85

 
7

 
98

 
302

U.S. states and political subdivisions
9

 
33

 
122

 
158

 
322

MBS - agency
1,802

 
7,119

 
14,088

 
786

 
23,795

MBS - non-agency residential

 
71

 

 

 
71

MBS - non-agency commercial
20

 
12

 
486

 
16

 
534

ABS

 
9

 

 

 
9

Corporate and other debt securities
15

 
19

 

 

 
34

Total debt securities AFS

$1,958

 

$9,682

 

$17,791

 

$1,058

 

$30,489

 Weighted average yield 1
3.16
%
 
2.32
%
 
2.60
%
 
2.98
%
 
2.56
%
1 Weighted average yields are based on amortized cost.

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 March 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," to the Company's 2016 Annual Report on Form 10-K.

Securities AFS in an unrealized loss position at period end are presented in the following tables:
 
March 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

$4,108

 

$71

 

$—

 

$—

 

$4,108

 

$71

Federal agency securities
94

 
1

 
3

 

 
97

 
1

U.S. states and political subdivisions
147

 
4

 

 

 
147

 
4

MBS - agency
14,445

 
280

 
500

 
7

 
14,945

 
287

MBS - non-agency commercial
325

 
6

 

 

 
325

 
6

ABS

 

 
5

 

 
5

 

Corporate and other debt securities
11

 

 

 

 
11

 

Other equity securities

 

 
4

 
1

 
4

 
1

Total temporarily impaired securities AFS
19,130

 
362


512


8


19,642


370

OTTI securities AFS 1:
 
 
 
 
 
 
 
 
 
 
 
MBS - non-agency residential

 

 
16

 

 
16

 

ABS

 

 
1

 

 
1

 

Total OTTI securities AFS

 

 
17

 

 
17

 

Total impaired securities AFS

$19,130

 

$362

 

$529

 

$8

 

$19,659

 

$370

1 OTTI securities AFS are impaired securities for which OTTI credit losses have been previously recognized in earnings.
2 Unrealized losses less than $0.5 million are presented as zero within the table.

 
December 31, 2016
 
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

$4,380

 

$86

 

$—

 

$—

 

$4,380

 

$86

Federal agency securities
96

 
2

 
3

 

 
99

 
2

U.S. states and political subdivisions
149

 
5

 

 

 
149

 
5

MBS - agency
14,622

 
285

 
451

 
8

 
15,073

 
293

MBS - non-agency commercial
184

 
5

 

 

 
184

 
5

ABS

 

 
5

 

 
5

 

Corporate and other debt securities
12

 

 

 

 
12

 

Other equity securities

 

 
4

 
1

 
4

 
1

Total temporarily impaired securities AFS
19,443

 
383

 
463

 
9

 
19,906

 
392

OTTI securities AFS 1:
 
 
 
 
 
 
 
 
 
 
 
MBS - non-agency residential
16

 

 

 

 
16

 

ABS

 

 
1

 

 
1

 

Total OTTI securities AFS
16

 

 
1

 

 
17

 

Total impaired securities AFS

$19,459

 

$383

 

$464

 

$9

 

$19,923

 

$392

1 OTTI securities AFS are impaired securities for which OTTI credit losses have been previously recognized in earnings.
2 Unrealized losses less than $0.5 million are presented as zero within the table.

At March 31, 2017, temporarily impaired securities AFS that have been in an unrealized loss position for twelve months or longer included agency MBS, federal agency securities, one ABS collateralized by 2004 vintage home equity loans, and one equity security. Unrealized losses on these temporarily impaired agency MBS and federal agency securities were due to market interest rates being higher than the securities' stated coupon rates. The Company continues to receive timely distributions on the temporarily impaired ABS and equity security, and the ABS is evaluated quarterly for credit impairment. Unrealized losses on securities AFS that relate to factors other than credit are recorded in AOCI, net of tax.
Realized Gains and Losses and Other-Than-Temporarily Impaired Securities AFS
Net securities gains/(losses) are comprised of gross realized gains, gross realized losses, and OTTI credit losses recognized in earnings. For both the three months ended March 31, 2017 and 2016, there were no gross realized gains, gross realized losses, or OTTI credit losses recognized in earnings.
Securities AFS in an unrealized loss position are evaluated quarterly for other-than-temporary credit impairment, which is determined using cash flow analyses that take into account security specific collateral and transaction structure. Future expected credit losses are determined using various assumptions, the most significant of which include default rates, prepayment rates, and loss severities. If, based on this analysis, a security is in an unrealized loss position and the Company does not expect to recover the entire amortized cost basis of the security, the expected cash flows are then discounted at the security’s initial effective interest rate to arrive at a present value amount. Credit losses on the OTTI security are recognized in earnings and reflect the difference between the present value of cash flows expected to be collected and the amortized cost basis of the security. See Note 1, "Significant Accounting Policies," to the Company's 2016 Annual Report on Form 10-K for additional information regarding the Company's policy on securities AFS and related impairments.
The Company seeks to reduce existing exposure on OTTI securities primarily through paydowns. In certain instances, the amount of credit losses recognized in earnings on a debt security exceeds the total unrealized losses on the security, which may result in unrealized gains relating to factors other than credit recorded in AOCI, net of tax.
During both the three months ended March 31, 2017 and 2016, there were no credit impairment losses recognized on securities AFS held at the end of the period. The accumulated balance of OTTI credit losses recognized in earnings on securities AFS held at period end was $22 million at March 31, 2017 and $24 million at March 31, 2016. Subsequent credit losses may be recorded on securities without a corresponding further decline in fair value when there has been a decline in expected cash flows.
Loans
Loans, Notes, Trade and Other Receivables, Excluding Allowance for Credit Losses [Text Block]
NOTE 6 - LOANS
Composition of Loan Portfolio
(Dollars in millions)
March 31, 2017
 
December 31, 2016
Commercial loans:
 
 
 
C&I

$68,971

 

$69,213

CRE
5,067

 
4,996

Commercial construction
4,215

 
4,015

Total commercial loans
78,253

 
78,224

Residential loans:
 
 
 
Residential mortgages - guaranteed
549

 
537

Residential mortgages - nonguaranteed 1
26,110

 
26,137

Residential home equity products
11,511

 
11,912

Residential construction
380

 
404

Total residential loans
38,550

 
38,990

Consumer loans:
 
 
 
Guaranteed student
6,396

 
6,167

Other direct
7,904

 
7,771

Indirect
11,067

 
10,736

Credit cards
1,359

 
1,410

Total consumer loans
26,726

 
26,084

LHFI

$143,529

 

$143,298

LHFS 2

$2,109

 

$4,169

1 Includes $221 million and $222 million of LHFI measured at fair value at March 31, 2017 and December 31, 2016, respectively.
2 Includes $1.8 billion and $3.5 billion of LHFS measured at fair value at March 31, 2017 and December 31, 2016, respectively.
During the three months ended March 31, 2017 and 2016, the Company transferred $60 million and $55 million in LHFI to LHFS, and $7 million and $5 million in LHFS to LHFI, respectively. In addition to sales of residential and commercial mortgage LHFS in the normal course of business, the Company sold $118 million and $18 million in loans and leases during the three months ended March 31, 2017 and 2016, respectively, at a price approximating their recorded investment.
During the three months ended March 31, 2017, the Company purchased $539 million of guaranteed student loans during the normal course of business and $99 million of indirect loans. During the three months ended March 31, 2016, the Company purchased $537 million of guaranteed student loans during the normal course of business.
At March 31, 2017 and December 31, 2016, the Company had $22.8 billion and $22.6 billion, respectively, of net eligible loan collateral pledged to the Federal Reserve discount window to support $17.0 billion of available, unused borrowing capacity at the end of each period.
At March 31, 2017 and December 31, 2016, the Company had $36.2 billion and $36.9 billion of net eligible loan collateral pledged to the FHLB of Atlanta to support $30.8 billion and $31.9 billion of available borrowing capacity, respectively. The available FHLB borrowing capacity at March 31, 2017 was used to support $2.3 billion of long-term debt and $6.1 billion of letters of credit issued on the Company's behalf. At December 31, 2016, the available FHLB borrowing capacity was used to support $2.8 billion of long-term debt and $7.3 billion of letters of credit issued on the Company's behalf.

Credit Quality Evaluation
The Company evaluates the credit quality of its loan portfolio by employing a dual internal risk rating system, which assigns both PD and LGD ratings to derive expected losses. Assignment of these ratings are predicated upon numerous factors, including consumer credit risk scores, rating agency information, borrower/guarantor financial capacity, LTV ratios, collateral type, debt service coverage ratios, collection experience, other internal metrics/analyses, and/or qualitative assessments.
For the commercial portfolio, the Company believes that the most appropriate credit quality indicator is an individual loan’s risk assessment expressed according to the broad regulatory agency classifications of Pass or Criticized. The Company conforms to the following regulatory classifications for Criticized assets: Other Assets Especially Mentioned (or Special Mention), Adversely Classified, Doubtful, and Loss. However, for the purposes of disclosure, management believes the most meaningful distinction within the Criticized categories is between Criticized accruing (which includes Special Mention and a portion of Adversely Classified) and Criticized nonaccruing (which includes a portion of Adversely Classified and Doubtful and Loss). This distinction identifies those relatively higher risk loans for which there is a basis to believe that the Company will not collect all amounts due under those loan agreements. The Company's risk rating system is more granular, with multiple risk ratings in both the Pass and Criticized categories. Pass ratings reflect relatively low PDs, whereas, Criticized assets have higher PDs. The granularity in Pass ratings assists in establishing pricing, loan structures, approval requirements, reserves, and ongoing credit management requirements. Commercial risk ratings are refreshed at least annually, or more frequently as appropriate, based upon considerations such as market conditions, borrower characteristics, and portfolio trends. Additionally, management routinely reviews portfolio risk ratings, trends, and concentrations to support risk identification and mitigation activities.
For consumer and residential loans, the Company monitors credit risk based on indicators such as delinquencies and FICO scores. The Company believes that consumer credit risk, as assessed by the industry-wide FICO scoring method, is a relevant credit quality indicator. Borrower-specific FICO scores are obtained at origination as part of the Company’s formal underwriting process, and refreshed FICO scores are obtained by the Company at least quarterly.
For government-guaranteed loans, the Company monitors the credit quality based primarily on delinquency status, as it is a more relevant indicator of credit quality due to the government guarantee. At March 31, 2017 and December 31, 2016, 31% and 29%, respectively, of the guaranteed residential loan portfolio was current with respect to payments. At March 31, 2017 and December 31, 2016, 76% and 75%, respectively, of the guaranteed student loan portfolio was current with respect to payments. The Company's loss exposure on guaranteed residential and student loans is mitigated by the government guarantee.
LHFI by credit quality indicator are presented in the following tables:
 
Commercial Loans
 
C&I
 
CRE
 
Commercial Construction
(Dollars in millions)
March 31, 2017
 
December 31, 2016
 
March 31, 2017
 
December 31, 2016
 
March 31, 2017
 
December 31, 2016
Risk rating:
 
 
 
 
 
 
 
 
 
 
 
Pass

$66,776

 

$66,920

 

$4,738

 

$4,574

 

$4,070

 

$3,914

Criticized accruing
1,867

 
1,903

 
323

 
415

 
127

 
84

Criticized nonaccruing
328

 
390

 
6

 
7

 
18

 
17

Total

$68,971

 

$69,213

 

$5,067

 

$4,996

 

$4,215

 

$4,015


 
Residential Loans 1
 
Residential Mortgages -
Nonguaranteed
 
Residential Home Equity Products
 
Residential Construction
(Dollars in millions)
March 31, 2017
 
December 31, 2016
 
March 31, 2017
 
December 31, 2016
 
March 31, 2017
 
December 31, 2016
Current FICO score range:
 
 
 
 
 
 
 
 
 
 
 
700 and above

$22,137

 

$22,194

 

$9,506

 

$9,826

 

$322

 

$292

620 - 699
3,037

 
3,042

 
1,468

 
1,540

 
47

 
96

Below 620 2
936

 
901

 
537

 
546

 
11

 
16

Total

$26,110

 

$26,137

 

$11,511

 

$11,912

 

$380

 

$404


 
Consumer Loans 3
 
Other Direct
 
Indirect
 
Credit Cards
(Dollars in millions)
March 31, 2017