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Georgia
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58-1575035
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Item 1.
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FINANCIAL STATEMENTS (UNAUDITED)
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Three Months Ended June 30
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Six Months Ended June 30
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||||||||||||
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
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2014
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|
2013
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2014
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2013
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||||||||
Interest Income
|
|
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||||||||
Interest and fees on loans
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$1,161
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$1,157
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$2,313
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$2,326
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Interest and fees on loans held for sale
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17
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29
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32
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60
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||||
Interest and dividends on securities available for sale
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149
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143
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302
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286
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||||
Trading account interest and other
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19
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18
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36
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34
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||||
Total interest income
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1,346
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1,347
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2,683
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2,706
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||||
Interest Expense
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||||||||
Interest on deposits
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61
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75
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126
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154
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||||
Interest on long-term debt
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66
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53
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124
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104
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||||
Interest on other borrowings
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10
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8
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19
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16
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||||
Total interest expense
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137
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136
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269
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274
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||||
Net interest income
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1,209
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1,211
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|
2,414
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2,432
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||||
Provision for credit losses
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73
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146
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175
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358
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||||
Net interest income after provision for credit losses
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1,136
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1,065
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2,239
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2,074
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||||
Noninterest Income
|
|
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||||||||
Service charges on deposit accounts
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160
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164
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314
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324
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||||
Other charges and fees
|
91
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|
97
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179
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186
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||||
Card fees
|
82
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78
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|
158
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154
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||||
Trust and investment management income
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116
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130
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247
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254
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||||
Retail investment services
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76
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69
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147
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130
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||||
Investment banking income
|
119
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|
93
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|
207
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|
161
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||||
Trading income
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47
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|
49
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|
96
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91
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||||
Mortgage servicing related income
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45
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1
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99
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39
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||||
Mortgage production related income
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52
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133
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|
95
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292
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||||
Gain on sale of subsidiary
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105
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—
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105
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—
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||||
Net securities (losses)/gains
1
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(1
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)
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—
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(2
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)
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2
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||||
Other noninterest income
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65
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44
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103
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88
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||||
Total noninterest income
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957
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858
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1,748
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1,721
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||||
Noninterest Expense
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||||||||
Employee compensation
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659
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635
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1,319
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1,246
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||||
Employee benefits
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104
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102
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244
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250
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Outside processing and software
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181
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187
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351
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365
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Operating losses
|
218
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72
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239
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111
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||||
Net occupancy expense
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83
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86
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169
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175
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Equipment expense
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42
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46
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86
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91
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Regulatory assessments
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40
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41
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80
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|
95
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Marketing and customer development
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30
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31
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56
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61
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Credit and collection services
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23
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52
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46
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85
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Amortization of intangible assets
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4
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6
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7
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12
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Other noninterest expense
2
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133
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129
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277
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249
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||||
Total noninterest expense
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1,517
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1,387
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2,874
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2,740
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Income before provision for income taxes
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576
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536
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1,113
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1,055
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Provision for income taxes
2
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173
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156
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298
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317
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Net income including income attributable to noncontrolling interest
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403
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380
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815
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738
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Net income attributable to noncontrolling interest
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4
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3
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11
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9
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||||
Net income
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$399
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$377
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$804
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$729
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Net income available to common shareholders
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$387
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$365
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$780
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$705
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Net income per average common share:
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Diluted
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$0.72
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$0.68
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$1.45
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$1.31
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Basic
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0.73
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0.68
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1.47
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|
1.32
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Dividends declared per common share
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0.20
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|
0.10
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0.30
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|
0.15
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||||
Average common shares - diluted
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535,486
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539,763
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536,234
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539,812
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||||
Average common shares - basic
|
529,764
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535,172
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530,459
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|
|
535,425
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Three Months Ended June 30
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Six Months Ended June 30
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||||||||||||
(Dollars in millions) (Unaudited)
|
2014
|
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2013
|
|
2014
|
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2013
|
||||||||
Net income
|
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$399
|
|
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$377
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|
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$804
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$729
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Components of other comprehensive income/(loss):
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||||||||
Change in net unrealized gains/(losses) on securities,
net of tax of $102, ($223), $165, and ($265), respectively
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175
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(382
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)
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284
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(455
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)
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||||
Change in net unrealized losses on derivatives,
net of tax of ($21), ($54), ($50), and ($96), respectively
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(36
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)
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(91
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)
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(86
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)
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(163
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)
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||||
Change related to employee benefit plans,
net of tax of $1, $3, $19, and $15, respectively
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2
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5
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|
32
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|
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26
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|
||||
Total other comprehensive income/(loss)
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141
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(468
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)
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230
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|
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(592
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)
|
||||
Total comprehensive income/(loss)
|
|
$540
|
|
|
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($91
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)
|
|
|
$1,034
|
|
|
|
$137
|
|
|
June 30,
|
|
December 31,
|
||||
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
|
$5,681
|
|
|
|
$4,258
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|
Federal funds sold and securities borrowed or purchased under agreements to resell
|
1,156
|
|
|
983
|
|
||
Interest-bearing deposits in other banks
|
22
|
|
|
22
|
|
||
Cash and cash equivalents
|
6,859
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|
|
5,263
|
|
||
Trading assets and derivatives (includes encumbered securities pledged against repurchase
agreements o
f $814 and $731 at June 30, 2014 and
December 31, 2013, respectively)
|
5,141
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|
|
5,040
|
|
||
Securities available for sale
|
24,015
|
|
|
22,542
|
|
||
Loans held for sale
1
($1,353 and $1,378 at fair value at June 30, 2014 and December 31, 2013, respectively)
|
4,046
|
|
|
1,699
|
|
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Loans
2
($292 and $302 at fair value at June 30, 2014 and December 31, 2013, respectively)
|
129,744
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|
|
127,877
|
|
||
Allowance for loan and lease losses
|
(2,003
|
)
|
|
(2,044
|
)
|
||
Net loans
|
127,741
|
|
|
125,833
|
|
||
Premises and equipment
|
1,518
|
|
|
1,565
|
|
||
Goodwill
|
6,337
|
|
|
6,369
|
|
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Other intangible assets (MSRs at fair value: $1,259 and $1,300 at June 30, 2014 and December 31, 2013, respectively)
|
1,277
|
|
|
1,334
|
|
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Other real estate owned
|
136
|
|
|
170
|
|
||
Other assets
|
5,489
|
|
|
5,520
|
|
||
Total assets
|
|
$182,559
|
|
|
|
$175,335
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Noninterest-bearing deposits
|
|
$40,891
|
|
|
|
$38,800
|
|
Interest-bearing deposits (CDs at fair value: $240 and $764 at June 30, 2014 and December 31, 2013, respectively)
|
92,394
|
|
|
90,959
|
|
||
Total deposits
|
133,285
|
|
|
129,759
|
|
||
Funds purchased
|
1,053
|
|
|
1,192
|
|
||
Securities sold under agreements to repurchase
|
2,192
|
|
|
1,759
|
|
||
Other short-term borrowings
|
5,870
|
|
|
5,788
|
|
||
Long-term debt
3
($1,311 and $1,556 at fair value at June 30, 2014 and December 31, 2013, respectively)
|
13,155
|
|
|
10,700
|
|
||
Trading liabilities and derivatives
|
1,190
|
|
|
1,181
|
|
||
Other liabilities
|
3,683
|
|
|
3,534
|
|
||
Total liabilities
|
160,428
|
|
|
153,913
|
|
||
Preferred stock, no par value
|
725
|
|
|
725
|
|
||
Common stock, $1.00 par value
|
550
|
|
|
550
|
|
||
Additional paid in capital
|
9,085
|
|
|
9,115
|
|
||
Retained earnings
|
12,560
|
|
|
11,936
|
|
||
Treasury stock, at cost, and other
4
|
(730
|
)
|
|
(615
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(59
|
)
|
|
(289
|
)
|
||
Total shareholders’ equity
|
22,131
|
|
|
21,422
|
|
||
Total liabilities and shareholders’ equity
|
|
$182,559
|
|
|
|
$175,335
|
|
|
|
|
|
||||
Common shares outstanding
|
532,800
|
|
|
536,097
|
|
||
Common shares authorized
|
750,000
|
|
|
750,000
|
|
||
Preferred shares outstanding
|
7
|
|
|
7
|
|
||
Preferred shares authorized
|
50,000
|
|
|
50,000
|
|
||
Treasury shares of common stock
|
17,121
|
|
|
13,824
|
|
||
1
Includes loans held for sale, at fair value, of consolidated VIEs
|
|
$—
|
|
|
|
$261
|
|
2
Includes loans of consolidated VIEs
|
307
|
|
|
327
|
|
||
3
Includes debt of consolidated VIEs ($0 and $256 at fair value at June 30, 2014 and December 31, 2013, respectively)
|
322
|
|
|
597
|
|
||
4
Includes noncontrolling interest
|
107
|
|
|
119
|
|
(Dollars and shares in millions, except per share data) (Unaudited)
|
Preferred
Stock
|
|
Common
Shares
Outstanding
|
|
Common
Stock
|
|
Additional
Paid in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock and
Other
1
|
|
Accumulated
Other
Comprehensive
(Loss)/Income
2
|
|
Total
|
|||||||||||||||
Balance, January 1, 2013
|
|
$725
|
|
|
539
|
|
|
|
$550
|
|
|
|
$9,174
|
|
|
|
$10,817
|
|
|
|
($590
|
)
|
|
|
$309
|
|
|
|
$20,985
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
729
|
|
|
—
|
|
|
—
|
|
|
729
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(592
|
)
|
|
(592
|
)
|
|||||||
Change in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Common stock dividends, $0.15 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|||||||
Preferred stock dividends
3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||||
Acquisition of treasury stock
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
|||||||
Exercise of stock options and stock compensation expense
|
—
|
|
|
1
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
25
|
|
|
—
|
|
|
10
|
|
|||||||
Restricted stock activity
|
—
|
|
|
1
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
37
|
|
|
—
|
|
|
4
|
|
|||||||
Amortization of restricted stock compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Issuance of stock for employee benefit plans and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Balance, June 30, 2013
|
|
$725
|
|
|
539
|
|
|
|
$550
|
|
|
|
$9,126
|
|
|
|
$11,447
|
|
|
|
($558
|
)
|
|
|
($283
|
)
|
|
|
$21,007
|
|
Balance, January 1, 2014
|
|
$725
|
|
|
536
|
|
|
|
$550
|
|
|
|
$9,115
|
|
|
|
$11,936
|
|
|
|
($615
|
)
|
|
|
($289
|
)
|
|
|
$21,422
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
804
|
|
|
—
|
|
|
—
|
|
|
804
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
230
|
|
|||||||
Change in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Common stock dividends, $0.30 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(160
|
)
|
|
—
|
|
|
—
|
|
|
(160
|
)
|
|||||||
Preferred stock dividends
3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||||
Acquisition of treasury stock
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
(133
|
)
|
|||||||
Exercise of stock options and stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
10
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Restricted stock activity
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
8
|
|
|||||||
Amortization of restricted stock compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||||
Change in equity related to the sale of subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(39
|
)
|
|||||||
Issuance of stock for employee benefit plans and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||||
Balance, June 30, 2014
|
|
$725
|
|
|
533
|
|
|
|
$550
|
|
|
|
$9,085
|
|
|
|
$12,560
|
|
|
|
($730
|
)
|
|
|
($59
|
)
|
|
|
$22,131
|
|
SunTrust Banks, Inc.
Consolidated Statements of Cash Flows
|
|||||||
|
Six Months Ended June 30
|
||||||
(Dollars in millions) (Unaudited)
|
2014
|
|
2013
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income including income attributable to noncontrolling interest
|
|
$815
|
|
|
|
$738
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gain on sale of subsidiary
|
(105
|
)
|
|
—
|
|
||
Depreciation, amortization, and accretion
|
328
|
|
|
365
|
|
||
Origination of mortgage servicing rights
|
(68
|
)
|
|
(203
|
)
|
||
Provisions for credit losses and foreclosed property
|
190
|
|
|
389
|
|
||
Mortgage repurchase provision
|
10
|
|
|
29
|
|
||
Stock option compensation and amortization of restricted stock compensation
|
6
|
|
|
16
|
|
||
Excess tax benefits from stock-based compensation
|
(4
|
)
|
|
—
|
|
||
Net securities losses/(gains)
|
2
|
|
|
(2
|
)
|
||
Net gain on sale of loans held for sale, loans, and other assets
|
(173
|
)
|
|
(350
|
)
|
||
Net decrease in loans held for sale
|
335
|
|
|
141
|
|
||
Net increase in other assets
|
(162
|
)
|
|
(274
|
)
|
||
Net decrease in other liabilities
|
(26
|
)
|
|
(125
|
)
|
||
Net cash provided by operating activities
|
1,148
|
|
|
724
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Proceeds from maturities, calls, and paydowns of securities available for sale
|
1,730
|
|
|
3,233
|
|
||
Proceeds from sales of securities available for sale
|
69
|
|
|
497
|
|
||
Purchases of securities available for sale
|
(2,949
|
)
|
|
(5,828
|
)
|
||
Proceeds from sales of trading securities
|
59
|
|
|
—
|
|
||
Net increase in loans, including purchases of loans
|
(5,612
|
)
|
|
(1,855
|
)
|
||
Proceeds from sales of loans
|
651
|
|
|
630
|
|
||
Purchases of mortgage servicing rights
|
(76
|
)
|
|
—
|
|
||
Capital expenditures
|
(60
|
)
|
|
(43
|
)
|
||
Payments related to acquisitions, including contingent consideration
|
(8
|
)
|
|
—
|
|
||
Proceeds from sale of subsidiary
|
193
|
|
|
—
|
|
||
Proceeds from the sale of other real estate owned and other assets
|
187
|
|
|
249
|
|
||
Net cash used in investing activities
|
(5,816
|
)
|
|
(3,117
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Net increase/(decrease) in total deposits
|
3,526
|
|
|
(4,697
|
)
|
||
Net increase in funds purchased, securities sold under agreements
to repurchase, and other short-term borrowings
|
376
|
|
|
2,620
|
|
||
Proceeds from long-term debt
|
2,704
|
|
|
609
|
|
||
Repayments of long-term debt
|
(39
|
)
|
|
(99
|
)
|
||
Repurchase of common stock
|
(133
|
)
|
|
(50
|
)
|
||
Common and preferred dividends paid
|
(179
|
)
|
|
(99
|
)
|
||
Stock option activity
|
9
|
|
|
11
|
|
||
Net cash provided by/(used in) financing activities
|
6,264
|
|
|
(1,705
|
)
|
||
Net increase/(decrease) in cash and cash equivalents
|
1,596
|
|
|
(4,098
|
)
|
||
Cash and cash equivalents at beginning of period
|
5,263
|
|
|
8,257
|
|
||
Cash and cash equivalents at end of period
|
|
$6,859
|
|
|
|
$4,159
|
|
|
|
|
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Loans transferred from loans held for sale to loans
|
|
$20
|
|
|
|
$17
|
|
Loans transferred from loans to loans held for sale
|
2,821
|
|
|
144
|
|
||
Loans transferred from loans and loans held for sale to other real estate owned
|
80
|
|
|
134
|
|
||
Non-cash impact of the deconsolidation of CLO
|
282
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
Date
|
|
Cash
Received
|
|
Goodwill
|
|
Other
Intangibles
|
|
Gain
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sale of RidgeWorth
|
|
5/30/2014
|
|
|
$193
|
|
|
|
($40
|
)
|
|
|
($9
|
)
|
|
|
$105
|
|
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Fed funds sold
|
|
$103
|
|
|
|
$75
|
|
Securities borrowed or purchased
|
334
|
|
|
184
|
|
||
Resell agreements
|
719
|
|
|
724
|
|
||
Total fed funds sold and securities borrowed or purchased under agreements to resell
|
|
$1,156
|
|
|
|
$983
|
|
(Dollars in millions)
|
Gross
Amount
|
|
Amount
Offset
|
|
Net Amount
Presented in
Consolidated
Balance Sheets
|
|
Held/Pledged Financial Instruments
|
|
Net
Amount
|
||||||||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed or purchased under agreements to resell
|
|
$1,053
|
|
|
|
$—
|
|
|
|
$1,053
|
|
1,2
|
|
$1,040
|
|
|
|
$13
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities sold under agreements to repurchase
|
2,192
|
|
|
—
|
|
|
2,192
|
|
1
|
2,192
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed or purchased under agreements to resell
|
|
$908
|
|
|
|
$—
|
|
|
|
$908
|
|
1,2
|
|
$899
|
|
|
|
$9
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities sold under agreements to repurchase
|
1,759
|
|
|
—
|
|
|
1,759
|
|
1
|
1,759
|
|
|
—
|
|
|
June 30, 2014
|
||||||||||||||
(Dollars in millions)
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair
Value |
||||||||
U.S. Treasury securities
|
|
$1,581
|
|
|
|
$10
|
|
|
|
$17
|
|
|
|
$1,574
|
|
Federal agency securities
|
1,005
|
|
|
17
|
|
|
32
|
|
|
990
|
|
||||
U.S. states and political subdivisions
|
243
|
|
|
8
|
|
|
—
|
|
|
251
|
|
||||
MBS - agency
|
19,692
|
|
|
555
|
|
|
182
|
|
|
20,065
|
|
||||
MBS - private
|
136
|
|
|
4
|
|
|
—
|
|
|
140
|
|
||||
ABS
|
20
|
|
|
2
|
|
|
—
|
|
|
22
|
|
||||
Corporate and other debt securities
|
38
|
|
|
3
|
|
|
—
|
|
|
41
|
|
||||
Other equity securities
1
|
931
|
|
|
1
|
|
|
—
|
|
|
932
|
|
||||
Total securities AFS
|
|
$23,646
|
|
|
|
$600
|
|
|
|
$231
|
|
|
|
$24,015
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2013
|
||||||||||||||
(Dollars in millions)
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair
Value |
||||||||
U.S. Treasury securities
|
|
$1,334
|
|
|
|
$6
|
|
|
|
$47
|
|
|
|
$1,293
|
|
Federal agency securities
|
1,028
|
|
|
13
|
|
|
57
|
|
|
984
|
|
||||
U.S. states and political subdivisions
|
232
|
|
|
7
|
|
|
2
|
|
|
237
|
|
||||
MBS - agency
|
18,915
|
|
|
421
|
|
|
425
|
|
|
18,911
|
|
||||
MBS - private
|
155
|
|
|
1
|
|
|
2
|
|
|
154
|
|
||||
ABS
|
78
|
|
|
2
|
|
|
1
|
|
|
79
|
|
||||
Corporate and other debt securities
|
39
|
|
|
3
|
|
|
—
|
|
|
42
|
|
||||
Other equity securities
1
|
841
|
|
|
1
|
|
|
—
|
|
|
842
|
|
||||
Total securities AFS
|
|
$22,622
|
|
|
|
$454
|
|
|
|
$534
|
|
|
|
$22,542
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Taxable interest
|
|
$138
|
|
|
|
$133
|
|
|
|
$279
|
|
|
|
$265
|
|
Tax-exempt interest
|
2
|
|
|
3
|
|
|
5
|
|
|
5
|
|
||||
Dividends
|
9
|
|
|
7
|
|
|
18
|
|
|
16
|
|
||||
Total interest and dividends
|
|
$149
|
|
|
|
$143
|
|
|
|
$302
|
|
|
|
$286
|
|
|
Distribution of Maturities
|
||||||||||||||||||
(Dollars in millions)
|
1 Year
or Less
|
|
1-5
Years
|
|
5-10
Years
|
|
After 10
Years
|
|
Total
|
||||||||||
Amortized Cost:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
|
$—
|
|
|
|
$892
|
|
|
|
$689
|
|
|
|
$—
|
|
|
|
$1,581
|
|
Federal agency securities
|
71
|
|
|
247
|
|
|
543
|
|
|
144
|
|
|
1,005
|
|
|||||
U.S. states and political subdivisions
|
65
|
|
|
53
|
|
|
102
|
|
|
23
|
|
|
243
|
|
|||||
MBS - agency
|
1,995
|
|
|
6,727
|
|
|
7,384
|
|
|
3,586
|
|
|
19,692
|
|
|||||
MBS - private
|
—
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|||||
ABS
|
15
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
20
|
|
|||||
Corporate and other debt securities
|
2
|
|
|
20
|
|
|
16
|
|
|
—
|
|
|
38
|
|
|||||
Total debt securities
|
|
$2,148
|
|
|
|
$8,079
|
|
|
|
$8,735
|
|
|
|
$3,753
|
|
|
|
$22,715
|
|
Fair Value:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
|
$—
|
|
|
|
$900
|
|
|
|
$674
|
|
|
|
$—
|
|
|
|
$1,574
|
|
Federal agency securities
|
71
|
|
|
259
|
|
|
518
|
|
|
142
|
|
|
990
|
|
|||||
U.S. states and political subdivisions
|
66
|
|
|
56
|
|
|
104
|
|
|
25
|
|
|
251
|
|
|||||
MBS - agency
|
2,114
|
|
|
6,912
|
|
|
7,522
|
|
|
3,517
|
|
|
20,065
|
|
|||||
MBS - private
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|||||
ABS
|
14
|
|
|
6
|
|
|
2
|
|
|
—
|
|
|
22
|
|
|||||
Corporate and other debt securities
|
2
|
|
|
22
|
|
|
17
|
|
|
—
|
|
|
41
|
|
|||||
Total debt securities
|
|
$2,267
|
|
|
|
$8,295
|
|
|
|
$8,837
|
|
|
|
$3,684
|
|
|
|
$23,083
|
|
Weighted average yield
1
|
2.71
|
%
|
|
2.44
|
%
|
|
2.86
|
%
|
|
2.92
|
%
|
|
2.71
|
%
|
|
June 30, 2014
|
||||||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$99
|
|
|
|
$—
|
|
|
|
$575
|
|
|
|
$17
|
|
|
|
$674
|
|
|
|
$17
|
|
Federal agency securities
|
3
|
|
|
—
|
|
|
615
|
|
|
32
|
|
|
618
|
|
|
32
|
|
||||||
MBS - agency
|
819
|
|
|
4
|
|
|
5,946
|
|
|
178
|
|
|
6,765
|
|
|
182
|
|
||||||
ABS
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||||
Total temporarily impaired securities
|
921
|
|
|
4
|
|
|
7,150
|
|
|
227
|
|
|
8,071
|
|
|
231
|
|
||||||
OTTI securities
1
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MBS - private
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||||
Total OTTI securities
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||||
Total impaired securities
|
|
$921
|
|
|
|
$4
|
|
|
|
$7,196
|
|
|
|
$227
|
|
|
|
$8,117
|
|
|
|
$231
|
|
|
December 31, 2013
|
||||||||||||||||||||||
|
Less than twelve months
|
|
Twelve months or longer
|
|
Total
|
||||||||||||||||||
(Dollars in millions)
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses |
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Temporarily impaired securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$1,036
|
|
|
|
$47
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$1,036
|
|
|
|
$47
|
|
Federal agency securities
|
398
|
|
|
29
|
|
|
264
|
|
|
28
|
|
|
662
|
|
|
57
|
|
||||||
U.S. states and political subdivisions
|
12
|
|
|
—
|
|
|
20
|
|
|
2
|
|
|
32
|
|
|
2
|
|
||||||
MBS - agency
|
9,173
|
|
|
358
|
|
|
618
|
|
|
67
|
|
|
9,791
|
|
|
425
|
|
||||||
ABS
|
—
|
|
|
—
|
|
|
13
|
|
|
1
|
|
|
13
|
|
|
1
|
|
||||||
Total temporarily impaired securities
|
10,619
|
|
|
434
|
|
|
915
|
|
|
98
|
|
|
11,534
|
|
|
532
|
|
||||||
OTTI securities
1
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MBS - private
|
105
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
2
|
|
||||||
Total OTTI securities
|
105
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
2
|
|
||||||
Total impaired securities
|
|
$10,724
|
|
|
|
$436
|
|
|
|
$915
|
|
|
|
$98
|
|
|
|
$11,639
|
|
|
|
$534
|
|
|
|
|
|
||||||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
OTTI
1
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
Portion of gains recognized in OCI (before taxes)
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Net impairment losses recognized in earnings
|
|
$1
|
|
|
|
$—
|
|
|
|
$1
|
|
|
|
$1
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Balance, beginning of period
|
|
$25
|
|
|
|
$32
|
|
|
|
$25
|
|
|
|
$31
|
|
Additions:
|
|
|
|
|
|
|
|
||||||||
OTTI credit losses on previously impaired securities
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Reductions:
|
|
|
|
|
|
|
|
||||||||
Increases in expected cash flows recognized over the remaining life of the securities
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Balance, end of period
|
|
$25
|
|
|
|
$32
|
|
|
|
$25
|
|
|
|
$32
|
|
|
2014
1
|
|
2013
|
Default rate
|
2%
|
|
6 - 9%
|
Prepayment rate
|
16%
|
|
7 - 8%
|
Loss severity
|
46%
|
|
61 - 74%
|
(Dollars in millions)
|
June 30,
2014 |
|
December 31, 2013
|
||||
Commercial loans:
|
|
|
|
||||
C&I
|
|
$61,337
|
|
|
|
$57,974
|
|
CRE
|
6,105
|
|
|
5,481
|
|
||
Commercial construction
|
1,096
|
|
|
855
|
|
||
Total commercial loans
|
68,538
|
|
|
64,310
|
|
||
Residential loans:
|
|
|
|
||||
Residential mortgages - guaranteed
|
661
|
|
|
3,416
|
|
||
Residential mortgages - nonguaranteed
1
|
24,173
|
|
|
24,412
|
|
||
Home equity products
|
14,519
|
|
|
14,809
|
|
||
Residential construction
|
508
|
|
|
553
|
|
||
Total residential loans
|
39,861
|
|
|
43,190
|
|
||
Consumer loans:
|
|
|
|
||||
Guaranteed student loans
|
5,420
|
|
|
5,545
|
|
||
Other direct
|
3,675
|
|
|
2,829
|
|
||
Indirect
|
11,501
|
|
|
11,272
|
|
||
Credit cards
|
749
|
|
|
731
|
|
||
Total consumer loans
|
21,345
|
|
|
20,377
|
|
||
LHFI
|
|
$129,744
|
|
|
|
$127,877
|
|
LHFS
2
|
|
$4,046
|
|
|
|
$1,699
|
|
|
Commercial Loans
|
||||||||||||||||||||||
|
C&I
|
|
CRE
|
|
Commercial construction
|
||||||||||||||||||
(Dollars in millions)
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
||||||||||||
Credit rating:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pass
|
|
$59,854
|
|
|
|
$56,443
|
|
|
|
$5,902
|
|
|
|
$5,245
|
|
|
|
$1,059
|
|
|
|
$798
|
|
Criticized accruing
|
1,284
|
|
|
1,335
|
|
|
165
|
|
|
197
|
|
|
27
|
|
|
45
|
|
||||||
Criticized nonaccruing
|
199
|
|
|
196
|
|
|
38
|
|
|
39
|
|
|
10
|
|
|
12
|
|
||||||
Total
|
|
$61,337
|
|
|
|
$57,974
|
|
|
|
$6,105
|
|
|
|
$5,481
|
|
|
|
$1,096
|
|
|
|
$855
|
|
|
Residential Loans
1
|
||||||||||||||||||||||
|
Residential mortgages -
nonguaranteed
|
|
Home equity products
|
|
Residential construction
|
||||||||||||||||||
(Dollars in millions)
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
||||||||||||
Current FICO score range:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
700 and above
|
|
$19,038
|
|
|
|
$19,100
|
|
|
|
$11,558
|
|
|
|
$11,661
|
|
|
|
$385
|
|
|
|
$423
|
|
620 - 699
|
3,603
|
|
|
3,652
|
|
|
2,087
|
|
|
2,186
|
|
|
89
|
|
|
90
|
|
||||||
Below 620
2
|
1,532
|
|
|
1,660
|
|
|
874
|
|
|
962
|
|
|
34
|
|
|
40
|
|
||||||
Total
|
|
$24,173
|
|
|
|
$24,412
|
|
|
|
$14,519
|
|
|
|
$14,809
|
|
|
|
$508
|
|
|
|
$553
|
|
|
Consumer Loans
3
|
||||||||||||||||||||||
|
Other direct
|
|
Indirect
|
|
Credit cards
|
||||||||||||||||||
(Dollars in millions)
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
|
June 30,
2014 |
|
December 31, 2013
|
||||||||||||
Current FICO score range:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
700 and above
|
|
$3,161
|
|
|
|
$2,370
|
|
|
|
$8,554
|
|
|
|
$8,420
|
|
|
|
$528
|
|
|
|
$512
|
|
620 - 699
|
453
|
|
|
397
|
|
|
2,316
|
|
|
2,228
|
|
|
178
|
|
|
176
|
|
||||||
Below 620
2
|
61
|
|
|
62
|
|
|
631
|
|
|
624
|
|
|
43
|
|
|
43
|
|
||||||
Total
|
|
$3,675
|
|
|
|
$2,829
|
|
|
|
$11,501
|
|
|
|
$11,272
|
|
|
|
$749
|
|
|
|
$731
|
|
|
June 30, 2014
|
||||||||||||||||||
(Dollars in millions)
|
Accruing
Current
|
|
Accruing
30-89 Days
Past Due
|
|
Accruing
90+ Days
Past Due
|
|
Nonaccruing
2
|
|
Total
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
C&I
|
|
$61,085
|
|
|
|
$42
|
|
|
|
$11
|
|
|
|
$199
|
|
|
|
$61,337
|
|
CRE
|
6,063
|
|
|
4
|
|
|
—
|
|
|
38
|
|
|
6,105
|
|
|||||
Commercial construction
|
1,086
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
1,096
|
|
|||||
Total commercial loans
|
68,234
|
|
|
46
|
|
|
11
|
|
|
247
|
|
|
68,538
|
|
|||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgages - guaranteed
|
181
|
|
|
35
|
|
|
445
|
|
|
—
|
|
|
661
|
|
|||||
Residential mortgages - nonguaranteed
1
|
23,642
|
|
|
112
|
|
|
14
|
|
|
405
|
|
|
24,173
|
|
|||||
Home equity products
|
14,224
|
|
|
104
|
|
|
—
|
|
|
191
|
|
|
14,519
|
|
|||||
Residential construction
|
457
|
|
|
4
|
|
|
1
|
|
|
46
|
|
|
508
|
|
|||||
Total residential loans
|
38,504
|
|
|
255
|
|
|
460
|
|
|
642
|
|
|
39,861
|
|
|||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Guaranteed student loans
|
4,430
|
|
|
424
|
|
|
566
|
|
|
—
|
|
|
5,420
|
|
|||||
Other direct
|
3,648
|
|
|
21
|
|
|
2
|
|
|
4
|
|
|
3,675
|
|
|||||
Indirect
|
11,432
|
|
|
62
|
|
|
1
|
|
|
6
|
|
|
11,501
|
|
|||||
Credit cards
|
738
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
749
|
|
|||||
Total consumer loans
|
20,248
|
|
|
513
|
|
|
574
|
|
|
10
|
|
|
21,345
|
|
|||||
Total LHFI
|
|
$126,986
|
|
|
|
$814
|
|
|
|
$1,045
|
|
|
|
$899
|
|
|
|
$129,744
|
|
|
December 31, 2013
|
||||||||||||||||||
(Dollars in millions)
|
Accruing
Current
|
|
Accruing
30-89 Days
Past Due
|
|
Accruing
90+ Days
Past Due
|
|
Nonaccruing
2
|
|
Total
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
C&I
|
|
$57,713
|
|
|
|
$47
|
|
|
|
$18
|
|
|
|
$196
|
|
|
|
$57,974
|
|
CRE
|
5,430
|
|
|
5
|
|
|
7
|
|
|
39
|
|
|
5,481
|
|
|||||
Commercial construction
|
842
|
|
|
1
|
|
|
—
|
|
|
12
|
|
|
855
|
|
|||||
Total commercial loans
|
63,985
|
|
|
53
|
|
|
25
|
|
|
247
|
|
|
64,310
|
|
|||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgages - guaranteed
|
2,787
|
|
|
58
|
|
|
571
|
|
|
—
|
|
|
3,416
|
|
|||||
Residential mortgages - nonguaranteed
1
|
23,808
|
|
|
150
|
|
|
13
|
|
|
441
|
|
|
24,412
|
|
|||||
Home equity products
|
14,480
|
|
|
119
|
|
|
—
|
|
|
210
|
|
|
14,809
|
|
|||||
Residential construction
|
488
|
|
|
4
|
|
|
—
|
|
|
61
|
|
|
553
|
|
|||||
Total residential loans
|
41,563
|
|
|
331
|
|
|
584
|
|
|
712
|
|
|
43,190
|
|
|||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Guaranteed student loans
|
4,475
|
|
|
461
|
|
|
609
|
|
|
—
|
|
|
5,545
|
|
|||||
Other direct
|
2,803
|
|
|
18
|
|
|
3
|
|
|
5
|
|
|
2,829
|
|
|||||
Indirect
|
11,189
|
|
|
75
|
|
|
1
|
|
|
7
|
|
|
11,272
|
|
|||||
Credit cards
|
718
|
|
|
7
|
|
|
6
|
|
|
—
|
|
|
731
|
|
|||||
Total consumer loans
|
19,185
|
|
|
561
|
|
|
619
|
|
|
12
|
|
|
20,377
|
|
|||||
Total LHFI
|
|
$124,733
|
|
|
|
$945
|
|
|
|
$1,228
|
|
|
|
$971
|
|
|
|
$127,877
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
(Dollars in millions)
|
Unpaid
Principal
Balance
|
|
Amortized
Cost
1
|
|
Related
Allowance
|
|
Unpaid
Principal
Balance
|
|
Amortized
Cost
1
|
|
Related
Allowance
|
||||||||||||
Impaired loans with no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
C&I
|
|
$87
|
|
|
|
$66
|
|
|
|
$—
|
|
|
|
$81
|
|
|
|
$56
|
|
|
|
$—
|
|
CRE
|
16
|
|
|
14
|
|
|
—
|
|
|
61
|
|
|
60
|
|
|
—
|
|
||||||
Total commercial loans
|
103
|
|
|
80
|
|
|
—
|
|
|
142
|
|
|
116
|
|
|
—
|
|
||||||
Residential mortgages - nonguaranteed
|
723
|
|
|
452
|
|
|
—
|
|
|
740
|
|
|
442
|
|
|
—
|
|
||||||
Impaired loans with an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
C&I
|
57
|
|
|
49
|
|
|
4
|
|
|
51
|
|
|
49
|
|
|
10
|
|
||||||
CRE
|
14
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
3
|
|
|
—
|
|
||||||
Commercial construction
|
6
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
||||||
Total commercial loans
|
77
|
|
|
59
|
|
|
4
|
|
|
65
|
|
|
55
|
|
|
10
|
|
||||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgages - nonguaranteed
|
1,486
|
|
|
1,467
|
|
|
238
|
|
|
1,617
|
|
|
1,609
|
|
|
226
|
|
||||||
Home equity products
|
702
|
|
|
632
|
|
|
88
|
|
|
710
|
|
|
638
|
|
|
96
|
|
||||||
Residential construction
|
211
|
|
|
172
|
|
|
23
|
|
|
241
|
|
|
189
|
|
|
23
|
|
||||||
Total residential loans
|
2,399
|
|
|
2,271
|
|
|
349
|
|
|
2,568
|
|
|
2,436
|
|
|
345
|
|
||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other direct
|
14
|
|
|
14
|
|
|
1
|
|
|
14
|
|
|
14
|
|
|
—
|
|
||||||
Indirect
|
97
|
|
|
97
|
|
|
5
|
|
|
83
|
|
|
83
|
|
|
5
|
|
||||||
Credit cards
|
10
|
|
|
10
|
|
|
2
|
|
|
13
|
|
|
13
|
|
|
3
|
|
||||||
Total consumer loans
|
121
|
|
|
121
|
|
|
8
|
|
|
110
|
|
|
110
|
|
|
8
|
|
||||||
Total impaired loans
|
|
$3,423
|
|
|
|
$2,983
|
|
|
|
$361
|
|
|
|
$3,625
|
|
|
|
$3,159
|
|
|
|
$363
|
|
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Nonaccrual/NPLs:
|
|
|
|
||||
Commercial loans:
|
|
|
|
||||
C&I
|
|
$199
|
|
|
|
$196
|
|
CRE
|
38
|
|
|
39
|
|
||
Commercial construction
|
10
|
|
|
12
|
|
||
Residential loans:
|
|
|
|
||||
Residential mortgages - nonguaranteed
|
405
|
|
|
441
|
|
||
Home equity products
|
191
|
|
|
210
|
|
||
Residential construction
|
46
|
|
|
61
|
|
||
Consumer loans:
|
|
|
|
||||
Other direct
|
4
|
|
|
5
|
|
||
Indirect
|
6
|
|
|
7
|
|
||
Total nonaccrual/NPLs
1
|
899
|
|
|
971
|
|
||
OREO
2
|
136
|
|
|
170
|
|
||
Other repossessed assets
|
6
|
|
|
7
|
|
||
Nonperforming LHFS
|
—
|
|
|
17
|
|
||
Total NPAs
|
|
$1,041
|
|
|
|
$1,165
|
|
|
Three Months Ended June 30, 2014
1
|
|||||||||||||||||
(Dollars in millions)
|
Number of Loans Modified
|
|
Principal
Forgiveness 2 |
|
Rate
Modification 3 |
|
Term Extension and/or Other Concessions
|
|
Total
|
|||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
C&I
|
27
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$12
|
|
|
|
$12
|
|
|
CRE
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential mortgages - nonguaranteed
|
365
|
|
1
|
|
|
43
|
|
|
11
|
|
|
55
|
|
|||||
Home equity products
|
471
|
|
—
|
|
|
2
|
|
|
20
|
|
|
22
|
|
|||||
Residential construction
|
4
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
Other direct
|
21
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Indirect
|
712
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|||||
Credit cards
|
130
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total TDRs
|
1,732
|
|
|
|
$4
|
|
|
|
$46
|
|
|
|
$57
|
|
|
|
$107
|
|
|
Six Months Ended June 30, 2014
1
|
||||||||||||||||
(Dollars in millions)
|
Number of Loans Modified
|
|
Principal
Forgiveness
2
|
|
Rate
Modification
3
|
|
Term Extension and/or Other Concessions
|
|
Total
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
||||||||
C&I
|
43
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$14
|
|
|
|
$14
|
|
CRE
|
4
|
|
3
|
|
|
—
|
|
|
3
|
|
|
6
|
|
||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgages - nonguaranteed
|
678
|
|
1
|
|
|
86
|
|
|
28
|
|
|
115
|
|
||||
Home equity products
|
904
|
|
—
|
|
|
5
|
|
|
38
|
|
|
43
|
|
||||
Residential construction
|
10
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Other direct
|
38
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Indirect
|
1,551
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
||||
Credit cards
|
227
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total TDRs
|
3,455
|
|
|
$4
|
|
|
|
$93
|
|
|
|
$114
|
|
|
|
$211
|
|
|
Three Months Ended June 30, 2013
1
|
||||||||||||||||
(Dollars in millions)
|
Number of Loans Modified
|
|
Principal
Forgiveness
2
|
|
Rate
Modification
3
|
|
Term Extension and/or Other Concessions
|
|
Total
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
||||||||
C&I
|
29
|
|
|
$18
|
|
|
|
$—
|
|
|
|
$15
|
|
|
|
$33
|
|
CRE
|
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgages - nonguaranteed
|
637
|
|
—
|
|
|
36
|
|
|
53
|
|
|
89
|
|
||||
Home equity products
|
755
|
|
—
|
|
|
17
|
|
|
31
|
|
|
48
|
|
||||
Residential construction
|
104
|
|
—
|
|
|
7
|
|
|
2
|
|
|
9
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Other direct
|
32
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Indirect
|
831
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
||||
Credit cards
|
155
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total TDRs
|
2,544
|
|
|
$18
|
|
|
|
$61
|
|
|
|
$118
|
|
|
|
$197
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2013
1
|
||||||||||||||||
(Dollars in millions)
|
Number of Loans Modified
|
|
Principal
Forgiveness 2 |
|
Rate
Modification 3 |
|
Term Extension and/or Other Concessions
|
|
Total
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
||||||||
C&I
|
96
|
|
|
$18
|
|
|
|
$2
|
|
|
|
$49
|
|
|
|
$69
|
|
CRE
|
5
|
|
—
|
|
|
4
|
|
|
1
|
|
|
5
|
|
||||
Residential loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgages - nonguaranteed
|
913
|
|
—
|
|
|
61
|
|
|
70
|
|
|
131
|
|
||||
Home equity products
|
1,438
|
|
—
|
|
|
36
|
|
|
48
|
|
|
84
|
|
||||
Residential construction
|
217
|
|
—
|
|
|
18
|
|
|
4
|
|
|
22
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Other direct
|
80
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Indirect
|
1,734
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
||||
Credit cards
|
386
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total TDRs
|
4,869
|
|
|
$18
|
|
|
|
$123
|
|
|
|
$208
|
|
|
|
$349
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
|||||||||
(Dollars in millions)
|
Number of Loans
|
|
Amortized Cost
|
|
Number of Loans
|
|
Amortized Cost
|
|||||
Commercial loans:
|
|
|
|
|
|
|
|
|||||
C&I
|
22
|
|
|
$4
|
|
|
47
|
|
|
$5
|
|
|
Residential loans:
|
|
|
|
|
|
|
|
|||||
Residential mortgages
|
40
|
|
6
|
|
|
89
|
|
10
|
|
|||
Home equity products
|
24
|
|
2
|
|
|
47
|
|
3
|
|
|||
Residential construction
|
2
|
|
—
|
|
|
6
|
|
—
|
|
|||
Consumer loans:
|
|
|
|
|
|
|
|
|||||
Other direct
|
—
|
|
|
—
|
|
|
5
|
|
—
|
|
||
Indirect
|
46
|
|
|
—
|
|
|
89
|
|
1
|
|
||
Credit cards
|
63
|
|
1
|
|
|
83
|
|
1
|
|
|||
Total TDRs
|
197
|
|
|
|
$13
|
|
|
366
|
|
|
$20
|
|
|
Three Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2013
|
|||||||||
(Dollars in millions)
|
Number of Loans
|
|
Amortized Cost
|
|
Number of Loans
|
|
Amortized Cost
|
|||||
Commercial loans:
|
|
|
|
|
|
|
|
|||||
C&I
|
19
|
|
|
$—
|
|
|
42
|
|
|
$—
|
|
|
CRE
|
3
|
|
—
|
|
|
4
|
|
3
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
||
Residential loans:
|
|
|
|
|
|
|
|
|||||
Residential mortgages
|
80
|
|
6
|
|
|
156
|
|
10
|
|
|||
Home equity products
|
52
|
|
3
|
|
|
101
|
|
6
|
|
|||
Residential construction
|
10
|
|
—
|
|
|
16
|
|
2
|
|
|||
Consumer loans:
|
|
|
|
|
|
|
|
|||||
Other direct
|
2
|
|
—
|
|
|
9
|
|
—
|
|
|||
Indirect
|
49
|
|
1
|
|
|
88
|
|
1
|
|
|||
Credit cards
|
35
|
|
—
|
|
|
79
|
|
1
|
|
|||
Total TDRs
|
250
|
|
|
|
$10
|
|
|
496
|
|
|
$23
|
|
|
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Balance at beginning of period
|
|
$2,086
|
|
|
|
$2,205
|
|
|
|
$2,094
|
|
|
|
$2,219
|
|
Provision for loan losses
|
76
|
|
|
152
|
|
|
182
|
|
|
356
|
|
||||
(Benefit)/provision for unfunded commitments
|
(3
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|
2
|
|
||||
Loan charge-offs
|
(158
|
)
|
|
(233
|
)
|
|
(309
|
)
|
|
(506
|
)
|
||||
Loan recoveries
|
45
|
|
|
54
|
|
|
86
|
|
|
101
|
|
||||
Balance at end of period
|
|
$2,046
|
|
|
|
$2,172
|
|
|
|
$2,046
|
|
|
|
$2,172
|
|
|
|
|
|
|
|
|
|
||||||||
Components:
|
|
|
|
|
|
|
|
||||||||
ALLL
|
|
|
|
|
|
$2,003
|
|
|
|
$2,125
|
|
||||
Unfunded commitments reserve
1
|
|
|
|
|
43
|
|
|
47
|
|
||||||
Allowance for credit losses
|
|
|
|
|
|
$2,046
|
|
|
|
$2,172
|
|
|
Three Months Ended June 30, 2014
|
||||||||||||||
(Dollars in millions)
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||
Balance at beginning of period
|
|
$966
|
|
|
|
$910
|
|
|
|
$164
|
|
|
|
$2,040
|
|
Provision for loan losses
|
18
|
|
|
32
|
|
|
26
|
|
|
76
|
|
||||
Loan charge-offs
|
(38
|
)
|
|
(90
|
)
|
|
(30
|
)
|
|
(158
|
)
|
||||
Loan recoveries
|
12
|
|
|
23
|
|
|
10
|
|
|
45
|
|
||||
Balance at end of period
|
|
$958
|
|
|
|
$875
|
|
|
|
$170
|
|
|
|
$2,003
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30, 2013
|
||||||||||||||
(Dollars in millions)
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||
Balance at beginning of period
|
|
$921
|
|
|
|
$1,087
|
|
|
|
$144
|
|
|
|
$2,152
|
|
Provision for loan losses
|
42
|
|
|
78
|
|
|
32
|
|
|
152
|
|
||||
Loan charge-offs
|
(64
|
)
|
|
(143
|
)
|
|
(26
|
)
|
|
(233
|
)
|
||||
Loan recoveries
|
20
|
|
|
24
|
|
|
10
|
|
|
54
|
|
||||
Balance at end of period
|
|
$919
|
|
|
|
$1,046
|
|
|
|
$160
|
|
|
|
$2,125
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended June 30, 2014
|
||||||||||||||
(Dollars in millions)
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||
Balance at beginning of period
|
|
$946
|
|
|
|
$930
|
|
|
|
$168
|
|
|
|
$2,044
|
|
Provision for loan losses
|
57
|
|
|
80
|
|
|
45
|
|
|
182
|
|
||||
Loan charge-offs
|
(71
|
)
|
|
(175
|
)
|
|
(63
|
)
|
|
(309
|
)
|
||||
Loan recoveries
|
26
|
|
|
40
|
|
|
20
|
|
|
86
|
|
||||
Balance at end of period
|
|
$958
|
|
|
|
$875
|
|
|
|
$170
|
|
|
|
$2,003
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended June 30, 2013
|
||||||||||||||
(Dollars in millions)
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||
Balance at beginning of period
|
|
$902
|
|
|
|
$1,131
|
|
|
|
$141
|
|
|
|
$2,174
|
|
Provision for loan losses
|
106
|
|
|
190
|
|
|
60
|
|
|
356
|
|
||||
Loan charge-offs
|
(124
|
)
|
|
(321
|
)
|
|
(61
|
)
|
|
(506
|
)
|
||||
Loan recoveries
|
35
|
|
|
46
|
|
|
20
|
|
|
101
|
|
||||
Balance at end of period
|
|
$919
|
|
|
|
$1,046
|
|
|
|
$160
|
|
|
|
$2,125
|
|
|
June 30, 2014
|
||||||||||||||||||||||||||||||
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||||||||||||||||
(Dollars in millions)
|
Carrying
Value
|
|
Associated
ALLL
|
|
Carrying
Value
|
|
Associated
ALLL
|
|
Carrying
Value
|
|
Associated
ALLL
|
|
Carrying
Value
|
|
Associated
ALLL
|
||||||||||||||||
Individually evaluated
|
|
$139
|
|
|
|
$4
|
|
|
|
$2,723
|
|
|
|
$349
|
|
|
|
$121
|
|
|
|
$8
|
|
|
|
$2,983
|
|
|
|
$361
|
|
Collectively evaluated
|
68,399
|
|
|
954
|
|
|
36,846
|
|
|
526
|
|
|
21,224
|
|
|
162
|
|
|
126,469
|
|
|
1,642
|
|
||||||||
Total evaluated
|
68,538
|
|
|
958
|
|
|
39,569
|
|
|
875
|
|
|
21,345
|
|
|
170
|
|
|
129,452
|
|
|
2,003
|
|
||||||||
LHFI at fair value
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
||||||||
Total LHFI
|
|
$68,538
|
|
|
|
$958
|
|
|
|
$39,861
|
|
|
|
$875
|
|
|
|
$21,345
|
|
|
|
$170
|
|
|
|
$129,744
|
|
|
|
$2,003
|
|
|
December 31, 2013
|
||||||||||||||||||||||||||||||
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||||||||||||||||
(Dollars in millions)
|
Carrying
Value |
|
Associated
ALLL |
|
Carrying
Value |
|
Associated
ALLL |
|
Carrying
Value |
|
Associated
ALLL |
|
Carrying
Value |
|
Associated
ALLL |
||||||||||||||||
Individually evaluated
|
|
$171
|
|
|
|
$10
|
|
|
|
$2,878
|
|
|
|
$345
|
|
|
|
$110
|
|
|
|
$8
|
|
|
|
$3,159
|
|
|
|
$363
|
|
Collectively evaluated
|
64,139
|
|
|
936
|
|
|
40,010
|
|
|
585
|
|
|
20,267
|
|
|
160
|
|
|
124,416
|
|
|
1,681
|
|
||||||||
Total evaluated
|
64,310
|
|
|
946
|
|
|
42,888
|
|
|
930
|
|
|
20,377
|
|
|
168
|
|
|
127,575
|
|
|
2,044
|
|
||||||||
LHFI at fair value
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
||||||||
Total LHFI
|
|
$64,310
|
|
|
|
$946
|
|
|
|
$43,190
|
|
|
|
$930
|
|
|
|
$20,377
|
|
|
|
$168
|
|
|
|
$127,877
|
|
|
|
$2,044
|
|
(Dollars in millions)
|
Consumer Banking and Private Wealth Management
|
|
Wholesale Banking
|
|
Total
|
||||||
Balance, January 1, 2014
|
|
$4,262
|
|
|
|
$2,107
|
|
|
|
$6,369
|
|
Acquisition of Lantana Oil and Gas Partners, Inc.
|
—
|
|
|
8
|
|
|
8
|
|
|||
Sale of RidgeWorth
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|||
Balance, June 30, 2014
|
|
$4,262
|
|
|
|
$2,075
|
|
|
|
$6,337
|
|
Balance, January 1, 2013
|
|
$3,962
|
|
|
|
$2,407
|
|
|
|
$6,369
|
|
Intersegment transfers
|
300
|
|
|
(300
|
)
|
|
—
|
|
|||
Balance, June 30, 2013
|
|
$4,262
|
|
|
|
$2,107
|
|
|
|
$6,369
|
|
(Dollars in millions)
|
Core Deposit
Intangibles |
|
MSRs -
Fair Value |
|
Other
|
|
Total
|
||||||||
Balance, January 1, 2014
|
|
$4
|
|
|
|
$1,300
|
|
|
|
$30
|
|
|
|
$1,334
|
|
Amortization
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
(7
|
)
|
||||
MSRs originated
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
||||
MSRs purchased
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
||||
Changes in fair value:
|
|
|
|
|
|
|
|
||||||||
Due to changes in inputs and assumptions
1
|
—
|
|
|
(107
|
)
|
|
—
|
|
|
(107
|
)
|
||||
Other changes in fair value
2
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
||||
Sale of RidgeWorth
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Balance, June 30, 2014
|
|
$1
|
|
|
|
$1,259
|
|
|
|
$17
|
|
|
|
$1,277
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, January 1, 2013
|
|
$17
|
|
|
|
$899
|
|
|
|
$40
|
|
|
|
$956
|
|
Amortization
|
(7
|
)
|
|
—
|
|
|
(5
|
)
|
|
(12
|
)
|
||||
MSRs originated
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
||||
Changes in fair value:
|
|
|
|
|
|
|
|
||||||||
Due to changes in inputs and assumptions
1
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||
Other changes in fair value
2
|
—
|
|
|
(152
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Sale of MSRs
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Balance, June 30, 2013
|
|
$10
|
|
|
|
$1,199
|
|
|
|
$35
|
|
|
|
$1,244
|
|
|
|
|
|
|
|
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Fair value of retained MSRs
|
|
$1,259
|
|
|
|
$1,300
|
|
Prepayment rate assumption (annual)
|
9
|
%
|
|
8
|
%
|
||
Decline in fair value from 10% adverse change
|
|
$45
|
|
|
|
$38
|
|
Decline in fair value from 20% adverse change
|
88
|
|
|
74
|
|
||
Discount rate (annual)
|
11
|
%
|
|
12
|
%
|
||
Decline in fair value from 10% adverse change
|
|
$59
|
|
|
|
$66
|
|
Decline in fair value from 20% adverse change
|
114
|
|
|
126
|
|
||
Weighted-average life (in years)
|
7.0
|
|
|
7.7
|
|
||
Weighted-average coupon
|
4.3
|
%
|
|
4.4
|
%
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Cash flows on interests held
1
:
|
|
|
|
|
|
|
|
||||||||
Residential Mortgage Loans
2
|
|
$7
|
|
|
|
$11
|
|
|
|
$10
|
|
|
|
$17
|
|
Commercial and Corporate Loans
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
CDO Securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total cash flows on interests held
|
|
$7
|
|
|
|
$12
|
|
|
|
$10
|
|
|
|
$19
|
|
Servicing or management fees
1
:
|
|
|
|
|
|
|
|
||||||||
Residential Mortgage Loans
2
|
|
$—
|
|
|
|
$1
|
|
|
|
$1
|
|
|
|
$1
|
|
Commercial and Corporate Loans
|
1
|
|
|
2
|
|
|
4
|
|
|
5
|
|
||||
Total servicing or management fees
|
|
$1
|
|
|
|
$3
|
|
|
|
$5
|
|
|
|
$6
|
|
|
Portfolio Balance
1
|
|
Past Due and Nonaccrual
2
|
|
Net Charge-offs
|
||||||||||||||||||||||||||
|
June 30, 2014
|
|
December 31, 2013
|
|
June 30, 2014
|
|
December 31, 2013
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|||||||||||||||||||||||
Type of loan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$68,538
|
|
|
|
$64,310
|
|
|
|
$258
|
|
|
|
$272
|
|
|
|
$26
|
|
|
|
$44
|
|
|
|
$45
|
|
|
|
$89
|
|
Residential
|
39,861
|
|
|
43,190
|
|
|
1,102
|
|
|
1,296
|
|
|
67
|
|
|
119
|
|
|
135
|
|
|
275
|
|
||||||||
Consumer
|
21,345
|
|
|
20,377
|
|
|
584
|
|
|
631
|
|
|
20
|
|
|
16
|
|
|
43
|
|
|
41
|
|
||||||||
Total loan portfolio
|
129,744
|
|
|
127,877
|
|
|
1,944
|
|
|
2,199
|
|
|
113
|
|
|
179
|
|
|
223
|
|
|
405
|
|
||||||||
Managed securitized loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
—
|
|
|
1,617
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Residential
|
99,692
|
|
|
100,695
|
|
|
324
|
|
3
|
493
|
|
3
|
3
|
|
|
6
|
|
|
7
|
|
|
14
|
|
||||||||
Total managed loans
|
|
$229,436
|
|
|
|
$230,189
|
|
|
|
$2,268
|
|
|
|
$2,721
|
|
|
|
$116
|
|
|
|
$185
|
|
|
|
$230
|
|
|
|
$419
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(In millions, except per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
|
|
$399
|
|
|
|
$377
|
|
|
|
$804
|
|
|
|
$729
|
|
Preferred dividends
|
|
(9
|
)
|
|
(9
|
)
|
|
(19
|
)
|
|
(18
|
)
|
||||
Dividends and undistributed earnings allocated to unvested shares
|
|
(3
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Net income available to common shareholders
|
|
|
$387
|
|
|
|
$365
|
|
|
|
$780
|
|
|
|
$705
|
|
Average basic common shares
|
|
530
|
|
|
535
|
|
|
530
|
|
|
535
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
Restricted stock and warrants
|
|
4
|
|
|
3
|
|
|
4
|
|
|
3
|
|
||||
Average diluted common shares
|
|
535
|
|
|
540
|
|
|
536
|
|
|
540
|
|
||||
Net income per average common share - diluted
|
|
|
$0.72
|
|
|
|
$0.68
|
|
|
|
$1.45
|
|
|
|
$1.31
|
|
Net income per average common share - basic
|
|
|
$0.73
|
|
|
|
$0.68
|
|
|
|
$1.47
|
|
|
|
$1.32
|
|
|
|
|
|
|
|
|
|
Dividend yield
|
1.28
|
%
|
Expected stock price volatility
|
30.98
|
|
Risk-free interest rate (weighted average)
|
1.02
|
|
Expected life of options
|
6 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30
|
||||||||||||||
|
2014
|
|
2013
|
||||||||||||
(Dollars in millions)
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
Service cost
|
|
$1
|
|
1
|
|
$—
|
|
|
|
$1
|
|
1
|
|
$—
|
|
Interest cost
|
31
|
|
|
1
|
|
|
28
|
|
|
2
|
|
||||
Expected return on plan assets
|
(50
|
)
|
1
|
(1
|
)
|
|
(48
|
)
|
1
|
(2
|
)
|
||||
Amortization of prior service credit
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized net actuarial loss
|
4
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Net periodic benefit
|
|
($14
|
)
|
|
|
($2
|
)
|
|
|
($12
|
)
|
|
|
$—
|
|
|
|
|
|
|
Six Months Ended June 30
|
||||||||||||||
|
2014
|
|
2013
|
||||||||||||
(Dollars in millions)
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
Service cost
|
|
$2
|
|
1
|
|
$—
|
|
|
|
$2
|
|
1
|
|
$—
|
|
Interest cost
|
62
|
|
|
2
|
|
|
56
|
|
|
3
|
|
||||
Expected return on plan assets
|
(100
|
)
|
1
|
(3
|
)
|
|
(95
|
)
|
1
|
(3
|
)
|
||||
Amortization of prior service credit
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized net actuarial loss
|
8
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Net periodic benefit
|
|
($28
|
)
|
|
|
($4
|
)
|
|
|
($24
|
)
|
|
|
$—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|||||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
|||||||||||||
(Dollars in millions)
|
|
Notional
Amounts
|
|
Fair
Value
|
|
Notional
Amounts
|
|
Fair
Value
|
||||||||
Derivatives designated in cash flow hedging relationships
1
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts hedging floating rate loans
|
|
|
$16,900
|
|
|
|
$323
|
|
|
|
$2,000
|
|
|
|
$1
|
|
Derivatives designated in fair value hedging relationships
2
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts covering fixed rate debt
|
|
1,000
|
|
|
35
|
|
|
300
|
|
|
3
|
|
||||
Derivatives not designated as hedging instruments
3
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts covering:
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate debt
|
|
—
|
|
|
—
|
|
|
60
|
|
|
6
|
|
||||
MSRs
|
|
10,032
|
|
|
82
|
|
|
1,768
|
|
|
36
|
|
||||
LHFS, IRLCs
4
|
|
2,088
|
|
|
13
|
|
|
5,351
|
|
|
40
|
|
||||
Trading activity
5
|
|
55,871
|
|
|
2,407
|
|
|
62,785
|
|
|
2,211
|
|
||||
Foreign exchange rate contracts covering trading activity
|
|
2,766
|
|
|
56
|
|
|
3,146
|
|
|
53
|
|
||||
Credit contracts covering:
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
—
|
|
|
—
|
|
|
448
|
|
|
4
|
|
||||
Trading activity
6
|
|
1,408
|
|
|
19
|
|
|
1,422
|
|
|
16
|
|
||||
Equity contracts - Trading activity
5
|
|
18,113
|
|
|
2,596
|
|
|
28,999
|
|
|
2,831
|
|
||||
Other contracts:
|
|
|
|
|
|
|
|
|
||||||||
IRLCs and other
7
|
|
2,461
|
|
|
29
|
|
|
85
|
|
|
8
|
|
||||
Commodities
|
|
244
|
|
|
17
|
|
|
244
|
|
|
16
|
|
||||
Total
|
|
92,983
|
|
|
5,219
|
|
|
104,308
|
|
|
5,221
|
|
||||
Total derivatives
|
|
|
$110,883
|
|
|
|
$5,577
|
|
|
|
$106,608
|
|
|
|
$5,225
|
|
Total gross derivatives, before netting
|
|
|
|
|
$5,577
|
|
|
|
|
|
$5,225
|
|
||||
Less: Legally enforceable master netting agreements
|
|
|
|
(3,889
|
)
|
|
|
|
(3,889
|
)
|
||||||
Less: Cash collateral received/paid
|
|
|
|
(355
|
)
|
|
|
|
(972
|
)
|
||||||
Total derivatives, after netting
|
|
|
|
|
$1,333
|
|
|
|
|
|
$364
|
|
|
December 31, 2013
|
|||||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
|||||||||||||
(Dollars in millions)
|
|
Notional
Amounts
|
|
Fair
Value
|
|
Notional
Amounts
|
|
Fair
Value
|
||||||||
Derivatives designated in cash flow hedging relationships
1
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts hedging floating rate loans
|
|
|
$17,250
|
|
|
|
$471
|
|
|
|
$—
|
|
|
|
$—
|
|
Derivatives designated in fair value hedging relationships
2
|
||||||||||||||||
Interest rate contracts covering fixed rate debt
|
|
2,000
|
|
|
52
|
|
|
900
|
|
|
24
|
|
||||
Derivatives not designated as hedging instruments
3
|
||||||||||||||||
Interest rate contracts covering:
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate debt
|
|
—
|
|
|
—
|
|
|
60
|
|
|
7
|
|
||||
MSRs
|
|
1,425
|
|
|
27
|
|
|
6,898
|
|
|
79
|
|
||||
LHFS, IRLCs
4
|
|
4,561
|
|
|
30
|
|
|
1,317
|
|
|
5
|
|
||||
Trading activity
5
|
|
70,615
|
|
|
2,917
|
|
|
65,299
|
|
|
2,742
|
|
||||
Foreign exchange rate contracts covering trading activity
|
|
2,449
|
|
|
61
|
|
|
2,624
|
|
|
57
|
|
||||
Credit contracts covering:
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
—
|
|
|
—
|
|
|
427
|
|
|
5
|
|
||||
Trading activity
6
|
|
1,568
|
|
|
37
|
|
|
1,579
|
|
|
34
|
|
||||
Equity contracts - Trading activity
5
|
|
19,595
|
|
|
2,504
|
|
|
24,712
|
|
|
2,702
|
|
||||
Other contracts:
|
|
|
|
|
|
|
|
|
||||||||
IRLCs and other
7
|
|
1,114
|
|
|
12
|
|
|
755
|
|
|
4
|
|
||||
Commodities
|
|
241
|
|
|
14
|
|
|
228
|
|
|
14
|
|
||||
Total
|
|
101,568
|
|
|
5,602
|
|
|
103,899
|
|
|
5,649
|
|
||||
Total derivatives
|
|
|
$120,818
|
|
|
|
$6,125
|
|
|
|
$104,799
|
|
|
|
$5,673
|
|
Total gross derivatives, before netting
|
|
|
|
|
$6,125
|
|
|
|
|
|
$5,673
|
|
||||
Less: Legally enforceable master netting agreements
|
|
|
|
(4,284
|
)
|
|
|
|
(4,284
|
)
|
||||||
Less: Cash collateral received/paid
|
|
|
|
(457
|
)
|
|
|
|
(864
|
)
|
||||||
Total derivatives, after netting
|
|
|
|
|
$1,384
|
|
|
|
|
|
$525
|
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
||||||||||||
(Dollars in millions)
|
Amount of
pre-tax
gain
recognized in OCI on Derivatives (Effective Portion) |
|
Classification of gain/(loss)
reclassified
from AOCI into Income
(Effective Portion) |
|
Amount of pre-tax
gain
reclassified from AOCI into Income (Effective Portion) |
|
Amount of
pre-tax gain
recognized in OCI on Derivatives (Effective Portion) |
|
Amount of
pre-tax gain
reclassified
from AOCI
into Income
(Effective Portion) |
||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|||||||
Interest rate contracts hedging floating rate loans
1
|
44
|
|
|
Interest and fees on loans
|
|
74
|
|
|
|
$67
|
|
|
|
$149
|
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||||
(Dollars in millions)
|
Amount of gain on Derivatives
recognized in Income |
|
Amount of loss on related Hedged Items
recognized in Income |
|
Amount of gain recognized in Income on Hedges
(Ineffective Portion) |
|
Amount of gain
on Derivatives
recognized in Income |
|
Amount of loss
on related Hedged Items
recognized
in Income
|
|
Amount of gain
recognized in Income on Hedges
(Ineffective Portion) |
||||||||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|||||||||||||||||
Interest rate contracts hedging fixed rate debt
1
|
|
$8
|
|
|
|
($7
|
)
|
|
|
$1
|
|
|
|
$17
|
|
|
|
($16
|
)
|
|
|
$1
|
|
(Dollars in millions)
|
Classification of gain/(loss)
recognized in Income on Derivatives |
|
Amount of gain/(loss)
recognized in Income on Derivatives during the Three Months Ended June 30, 2014 |
|
Amount of gain/(loss)
recognized in Income on Derivatives during the Six Months Ended June 30, 2014 |
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Interest rate contracts covering:
|
|
|
|
|
|
||||
Fixed rate debt
|
Trading income
|
|
|
($1
|
)
|
|
|
($1
|
)
|
MSRs
|
Mortgage servicing related income
|
|
66
|
|
|
120
|
|
||
LHFS, IRLCs
|
Mortgage production related income
|
|
(61
|
)
|
|
(95
|
)
|
||
Trading activity
|
Trading income
|
|
12
|
|
|
26
|
|
||
Foreign exchange rate contracts covering:
|
|
|
|
|
|
||||
Trading activity
|
Trading income
|
|
(7
|
)
|
|
(1
|
)
|
||
Credit contracts covering:
|
|
|
|
|
|
||||
Loans
|
Other noninterest income
|
|
—
|
|
|
(1
|
)
|
||
Trading activity
|
Trading income
|
|
4
|
|
|
9
|
|
||
Equity contracts - trading activity
|
Trading income
|
|
2
|
|
|
3
|
|
||
Other contracts - IRLCs
|
Mortgage production related income
|
|
78
|
|
|
138
|
|
||
Total
|
|
|
|
$93
|
|
|
|
$198
|
|
|
Three Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2013
|
||||||||||||||
(Dollars in millions)
|
Amount of
pre-tax
loss
recognized
in OCI on Derivatives
(Effective Portion) |
|
Classification of gain/(loss)
reclassified
from AOCI into Income
(Effective Portion) |
|
Amount of
pre-tax
gain
reclassified from AOCI into Income
(Effective Portion)
|
|
Amount of
pre-tax loss
recognized in OCI
on Derivatives
(Effective Portion) |
|
Amount of
pre-tax gain
reclassified
from AOCI
into Income
(Effective Portion)
|
||||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate contracts hedging forecasted debt
|
|
($2
|
)
|
|
Interest on long-term debt
|
|
|
$—
|
|
|
|
($2
|
)
|
|
|
$—
|
|
Interest rate contracts hedging floating rate loans
1
|
(43
|
)
|
|
Interest and fees on loans
|
|
79
|
|
|
(43
|
)
|
|
166
|
|
||||
Total
|
|
($45
|
)
|
|
|
|
|
$79
|
|
|
|
($45
|
)
|
|
|
$166
|
|
|
Three Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2013
|
||||||||||||||||||||
(Dollars in millions)
|
Amount of loss on Derivatives recognized in Income
|
|
Amount of gain on related Hedged Items
recognized in Income |
|
Amount of gain/(loss) recognized
in Income
on Hedges (Ineffective Portion)
|
|
Amount of loss on Derivatives recognized in Income
|
|
Amount of gain on related Hedged Items
recognized in Income |
|
Amount of gain recognized
in Income on Hedges (Ineffective Portion) |
||||||||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|||||||||||||||||
Interest rate contracts hedging fixed rate debt
1
|
|
($18
|
)
|
|
|
$18
|
|
|
|
$—
|
|
|
|
($23
|
)
|
|
|
$24
|
|
|
|
$1
|
|
(Dollars in millions)
|
Classification of gain/(loss)
recognized in Income on Derivatives |
|
Amount of gain/(loss)
recognized in Income on Derivatives during the Three Months Ended June 30, 2013 |
|
Amount of gain/(loss)
recognized in Income on Derivatives during the Six Months Ended June 30, 2013 |
||||
Derivatives not designated as hedging instruments:
|
|
|
|||||||
Interest rate contracts covering:
|
|
|
|
|
|
||||
Fixed rate debt
|
Trading income
|
|
|
$2
|
|
|
|
$2
|
|
MSRs
|
Mortgage servicing related income
|
|
(158
|
)
|
|
|
($214
|
)
|
|
LHFS, IRLCs
|
Mortgage production related income
|
|
256
|
|
|
291
|
|
||
Trading activity
|
Trading income
|
|
18
|
|
|
26
|
|
||
Foreign exchange rate contracts covering:
|
|
|
|
|
|
||||
Commercial loans
|
Trading income
|
|
(3
|
)
|
|
(1
|
)
|
||
Trading activity
|
Trading income
|
|
14
|
|
|
26
|
|
||
Credit contracts covering:
|
|
|
|
|
|
||||
Loans
|
Other noninterest income
|
|
(1
|
)
|
|
(2
|
)
|
||
Trading activity
|
Trading income
|
|
5
|
|
|
10
|
|
||
Equity contracts - trading activity
|
Trading income
|
|
(16
|
)
|
|
(15
|
)
|
||
Other contracts - IRLCs
|
Mortgage production related income
|
|
(75
|
)
|
|
27
|
|
||
Total
|
|
|
|
$42
|
|
|
|
$150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
Gross
Amount
|
|
Amount
Offset
|
|
Net Amount
Presented in
Consolidated
Balance Sheets
|
|
Held/Pledged
Financial
Instruments
|
|
Net
Amount
|
||||||||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to master netting arrangement or similar arrangement
|
|
$4,804
|
|
|
|
$3,773
|
|
|
|
$1,031
|
|
|
|
$53
|
|
|
|
$978
|
|
Derivatives not subject to master netting arrangement or similar arrangement
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|||||
Exchange traded derivatives
|
744
|
|
|
471
|
|
|
273
|
|
|
—
|
|
|
273
|
|
|||||
Total derivative financial assets
|
|
$5,577
|
|
|
|
$4,244
|
|
|
|
$1,333
|
|
1
|
|
$53
|
|
|
|
$1,280
|
|
Derivative financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to master netting arrangement or similar arrangement
|
|
$4,572
|
|
|
|
$4,390
|
|
|
|
$182
|
|
|
|
$20
|
|
|
|
$162
|
|
Derivatives not subject to master netting arrangement or similar arrangement
|
182
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
|||||
Exchange traded derivatives
|
471
|
|
|
471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total derivative financial liabilities
|
|
$5,225
|
|
|
|
$4,861
|
|
|
|
$364
|
|
2
|
|
$20
|
|
|
|
$344
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to master netting arrangement or similar arrangement
|
|
$5,285
|
|
|
|
$4,239
|
|
|
|
$1,046
|
|
|
|
$51
|
|
|
|
$995
|
|
Derivatives not subject to master netting arrangement or similar arrangement
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Exchange traded derivatives
|
828
|
|
|
502
|
|
|
326
|
|
|
—
|
|
|
326
|
|
|||||
Total derivative financial assets
|
|
$6,125
|
|
|
|
$4,741
|
|
|
|
$1,384
|
|
1
|
|
$51
|
|
|
|
$1,333
|
|
Derivative financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to master netting arrangement or similar arrangement
|
|
$4,982
|
|
|
|
$4,646
|
|
|
|
$336
|
|
|
|
$13
|
|
|
|
$323
|
|
Derivatives not subject to master netting arrangement or similar arrangement
|
189
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
189
|
|
|||||
Exchange traded derivatives
|
502
|
|
|
502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total derivative financial liabilities
|
|
$5,673
|
|
|
|
$5,148
|
|
|
|
$525
|
|
2
|
|
$13
|
|
|
|
$512
|
|
•
|
The
Company
utilizes interest rate derivatives to mitigate exposures from various instruments.
|
◦
|
The
Company
is subject to interest rate risk on its fixed rate debt. As market interest rates move, the fair value of the
Company
’s debt is affected. To protect against this risk on certain debt issuances that the
Company
has elected to carry at fair value, the
Company
has entered into pay variable-receive fixed interest rate swaps that decrease in value in a rising rate environment and increase in value in a declining rate environment.
|
◦
|
The
Company
is exposed to risk on the returns of certain of its brokered deposits that are carried at fair value. To hedge against this risk, the
Company
has entered into interest rate derivatives that mirror the risk profile of the returns on these instruments.
|
◦
|
The
Company
is exposed to interest rate risk associated with
MSR
s, which the
Company
hedges with a combination of mortgage and interest rate derivatives, including forward and option contracts, futures, and forward rate agreements.
|
◦
|
The
Company
enters into mortgage and interest rate derivatives, including forward contracts, futures, and option contracts to mitigate interest rate risk associated with
IRLC
s and mortgage
LHFS
.
|
•
|
The
Company
is exposed to foreign exchange rate risk associated with certain commercial loans.
|
•
|
The
Company
enters into
CDS
to hedge credit risk associated with certain loans held within its Wholesale Banking segment. The
Company
accounts for these contracts as derivatives and, accordingly, recognizes these contracts at fair value, with changes in fair value recognized in other noninterest income in the Consolidated Statements of Income.
|
•
|
Trading activity, as illustrated in the tables within this footnote, primarily includes interest rate swaps, equity derivatives,
CDS
, futures, options, foreign currency contracts, and commodities. These derivatives are entered into in a dealer capacity to facilitate client transactions or are utilized as a risk management tool by the
Company
as an end user in certain macro-hedging strategies. The macro-hedging strategies are focused on managing the
Company
’s overall interest rate risk exposure that is not otherwise hedged by derivatives or in connection with specific hedges and, therefore, the
Company
does not specifically associate individual derivatives with specific assets or liabilities.
|
|
Remaining Outstanding Balance by Year of Sale
|
||||||||||||||||||||||||||||||||||||||||||
(Dollars in billions)
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
|
2014
|
|
|
Total
|
||||||||||||||||||||
GSE
1
|
|
$1.6
|
|
|
|
$1.8
|
|
|
|
$3.4
|
|
|
|
$3.2
|
|
|
|
$10.1
|
|
|
|
$6.7
|
|
|
|
$7.6
|
|
|
|
$16.8
|
|
|
|
$20.5
|
|
|
|
$4.7
|
|
|
|
$76.4
|
|
Ginnie Mae
1
|
0.4
|
|
|
0.2
|
|
|
0.2
|
|
|
1.0
|
|
|
2.8
|
|
|
2.3
|
|
|
1.9
|
|
|
3.7
|
|
|
3.4
|
|
|
1.2
|
|
|
17.1
|
|
|||||||||||
Non-agency
|
3.1
|
|
|
4.5
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.5
|
|
|||||||||||
Total
|
|
$5.1
|
|
|
|
$6.5
|
|
|
|
$6.5
|
|
|
|
$4.2
|
|
|
|
$12.9
|
|
|
|
$9.0
|
|
|
|
$9.5
|
|
|
|
$20.5
|
|
|
|
$23.9
|
|
|
|
$5.9
|
|
|
|
$104.0
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Balance at beginning of period
|
|
|
$83
|
|
|
|
$513
|
|
|
|
$78
|
|
|
|
$632
|
|
Repurchase provision
|
|
5
|
|
|
15
|
|
|
10
|
|
|
29
|
|
||||
Charge-offs, net of recoveries
|
|
(11
|
)
|
|
(165
|
)
|
|
(11
|
)
|
|
(298
|
)
|
||||
Balance at end of period
|
|
|
$77
|
|
|
|
$363
|
|
|
|
$77
|
|
|
|
$363
|
|
|
June 30, 2014
|
||||||||||||||||||
|
Fair Value Measurements
|
|
|
|
|
||||||||||||||
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
Adjustments
1
|
|
Assets/Liabilities
at Fair Value
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
|
$170
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$170
|
|
Federal agency securities
|
—
|
|
|
405
|
|
|
—
|
|
|
—
|
|
|
405
|
|
|||||
U.S. states and political subdivisions
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
MBS - agency
|
—
|
|
|
481
|
|
|
—
|
|
|
—
|
|
|
481
|
|
|||||
CLO securities
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
727
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|||||
CP
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|||||
Equity securities
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||
Derivative contracts
|
744
|
|
|
4,804
|
|
|
29
|
|
|
(4,244
|
)
|
|
1,333
|
|
|||||
Trading loans
|
—
|
|
|
1,789
|
|
|
—
|
|
|
—
|
|
|
1,789
|
|
|||||
Total trading assets and derivatives
|
972
|
|
|
8,384
|
|
|
29
|
|
|
(4,244
|
)
|
|
5,141
|
|
|||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
1,574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,574
|
|
|||||
Federal agency securities
|
—
|
|
|
990
|
|
|
—
|
|
|
—
|
|
|
990
|
|
|||||
U.S. states and political subdivisions
|
—
|
|
|
239
|
|
|
12
|
|
|
—
|
|
|
251
|
|
|||||
MBS - agency
|
—
|
|
|
20,065
|
|
|
—
|
|
|
—
|
|
|
20,065
|
|
|||||
MBS - private
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
|||||
ABS
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
36
|
|
|
5
|
|
|
—
|
|
|
41
|
|
|||||
Other equity securities
2
|
153
|
|
|
—
|
|
|
779
|
|
|
—
|
|
|
932
|
|
|||||
Total securities AFS
|
1,727
|
|
|
21,330
|
|
|
958
|
|
|
—
|
|
|
24,015
|
|
|||||
LHFS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential loans
|
—
|
|
|
1,350
|
|
|
3
|
|
|
—
|
|
|
1,353
|
|
|||||
Total LHFS
|
—
|
|
|
1,350
|
|
|
3
|
|
|
—
|
|
|
1,353
|
|
|||||
LHFI
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
|||||
MSRs
|
—
|
|
|
—
|
|
|
1,259
|
|
|
—
|
|
|
1,259
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading liabilities and derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
516
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
516
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|||||
Derivative contracts
|
471
|
|
|
4,746
|
|
|
8
|
|
|
(4,861
|
)
|
|
364
|
|
|||||
Total trading liabilities and derivatives
|
987
|
|
|
5,056
|
|
|
8
|
|
|
(4,861
|
)
|
|
1,190
|
|
|||||
Brokered time deposits
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|||||
Long-term debt
|
—
|
|
|
1,311
|
|
|
—
|
|
|
—
|
|
|
1,311
|
|
|||||
Other liabilities
3
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|
December 31, 2013
|
||||||||||||||||||
|
Fair Value Measurements
|
|
|
|
|
||||||||||||||
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
Adjustments
1
|
|
Assets/Liabilities
at Fair Value
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
|
$219
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$219
|
|
Federal agency securities
|
—
|
|
|
426
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|||||
U.S. states and political subdivisions
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
MBS - agency
|
—
|
|
|
323
|
|
|
—
|
|
|
—
|
|
|
323
|
|
|||||
CDO/CLO securities
|
—
|
|
|
3
|
|
|
54
|
|
|
—
|
|
|
57
|
|
|||||
ABS
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
534
|
|
|
—
|
|
|
—
|
|
|
534
|
|
|||||
CP
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Equity securities
|
109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|||||
Derivative contracts
|
828
|
|
|
5,285
|
|
|
12
|
|
|
(4,741
|
)
|
|
1,384
|
|
|||||
Trading loans
|
—
|
|
|
1,888
|
|
|
—
|
|
|
—
|
|
|
1,888
|
|
|||||
Total trading assets and derivatives
|
1,156
|
|
|
8,553
|
|
|
72
|
|
|
(4,741
|
)
|
|
5,040
|
|
|||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
1,293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,293
|
|
|||||
Federal agency securities
|
—
|
|
|
984
|
|
|
—
|
|
|
—
|
|
|
984
|
|
|||||
U.S. states and political subdivisions
|
—
|
|
|
203
|
|
|
34
|
|
|
—
|
|
|
237
|
|
|||||
MBS - agency
|
—
|
|
|
18,911
|
|
|
—
|
|
|
—
|
|
|
18,911
|
|
|||||
MBS - private
|
—
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
154
|
|
|||||
ABS
|
—
|
|
|
58
|
|
|
21
|
|
|
—
|
|
|
79
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
37
|
|
|
5
|
|
|
—
|
|
|
42
|
|
|||||
Other equity securities
2
|
103
|
|
|
—
|
|
|
739
|
|
|
—
|
|
|
842
|
|
|||||
Total securities AFS
|
1,396
|
|
|
20,193
|
|
|
953
|
|
|
—
|
|
|
22,542
|
|
|||||
LHFS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential loans
|
—
|
|
|
1,114
|
|
|
3
|
|
|
—
|
|
|
1,117
|
|
|||||
Corporate and other loans
|
—
|
|
|
261
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|||||
Total LHFS
|
—
|
|
|
1,375
|
|
|
3
|
|
|
—
|
|
|
1,378
|
|
|||||
LHFI
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
302
|
|
|||||
MSRs
|
—
|
|
|
—
|
|
|
1,300
|
|
|
—
|
|
|
1,300
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading liabilities and derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
472
|
|
|||||
Corporate and other debt securities
|
—
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|||||
Equity securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Derivative contracts
|
502
|
|
|
5,167
|
|
|
4
|
|
|
(5,148
|
)
|
|
525
|
|
|||||
Total trading liabilities and derivatives
|
979
|
|
|
5,346
|
|
|
4
|
|
|
(5,148
|
)
|
|
1,181
|
|
|||||
Brokered time deposits
|
—
|
|
|
764
|
|
|
—
|
|
|
—
|
|
|
764
|
|
|||||
Long-term debt
|
—
|
|
|
1,556
|
|
|
—
|
|
|
—
|
|
|
1,556
|
|
|||||
Other liabilities
3
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
(Dollars in millions)
|
Aggregate Fair Value at
June 30, 2014
|
|
Aggregate Unpaid Principal
Balance under FVO at
June 30, 2014
|
|
Fair Value
Over/(Under)
Unpaid Principal
|
||||||
Assets:
|
|
|
|
|
|
||||||
Trading loans
|
|
$1,789
|
|
|
|
$1,739
|
|
|
|
$50
|
|
LHFS
|
1,353
|
|
|
1,296
|
|
|
57
|
|
|||
LHFI
|
285
|
|
|
300
|
|
|
(15
|
)
|
|||
Nonaccrual
|
7
|
|
|
10
|
|
|
(3
|
)
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Brokered time deposits
|
240
|
|
|
239
|
|
|
1
|
|
|||
Long-term debt
|
1,311
|
|
|
1,176
|
|
|
135
|
|
|||
(Dollars in millions)
|
Aggregate Fair Value at
December 31, 2013 |
|
Aggregate Unpaid Principal
Balance under FVO at
December 31, 2013
|
|
Fair Value
Over/(Under)
Unpaid Principal
|
||||||
Assets:
|
|
|
|
|
|
||||||
Trading loans
|
|
$1,888
|
|
|
|
$1,858
|
|
|
|
$30
|
|
LHFS
|
1,375
|
|
|
1,359
|
|
|
16
|
|
|||
Past due 90 days or more
|
1
|
|
|
2
|
|
|
(1
|
)
|
|||
Nonaccrual
|
2
|
|
|
15
|
|
|
(13
|
)
|
|||
LHFI
|
294
|
|
|
317
|
|
|
(23
|
)
|
|||
Nonaccrual
|
8
|
|
|
12
|
|
|
(4
|
)
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Brokered time deposits
|
764
|
|
|
761
|
|
|
3
|
|
|||
Long-term debt
|
1,556
|
|
|
1,432
|
|
|
124
|
|
|
Fair Value Gain/(Loss) for the Three Months Ended
June 30, 2014, for Items Measured at Fair Value
Pursuant to Election of the FVO
|
|
Fair Value Gain/(Loss) for the Six Months Ended
June 30, 2014, for Items Measured at Fair Value
Pursuant to Election of the FVO
|
||||||||||||||||||||||||||||
(Dollars in millions)
|
Trading Income
|
|
Mortgage
Production
Related
Income
1
|
|
Mortgage
Servicing
Related
Income
|
|
Total Changes
in Fair Values
Included in
Current Period
Earnings
2
|
|
Trading
Income
|
|
Mortgage
Production Related
Income
1
|
|
Mortgage
Servicing
Related
Income
|
|
Total Changes
in Fair Values
Included in
Current
Period
Earnings
2
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading loans
|
|
$3
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$3
|
|
|
|
$9
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$9
|
|
LHFS
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
||||||||
LHFI
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
MSRs
|
—
|
|
|
2
|
|
|
(104
|
)
|
|
(102
|
)
|
|
—
|
|
|
2
|
|
|
(185
|
)
|
|
(183
|
)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Brokered time deposits
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||||
Long-term debt
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
Fair Value Gain/(Loss) for the Three Months Ended
June 30, 2013, for Items Measured at Fair Value
Pursuant to Election of the FVO
|
|
Fair Value Gain/(Loss) for the Six Months Ended
June 30, 2013, for Items Measured at Fair Value
Pursuant to Election of the FVO
|
||||||||||||||||||||||||||||
(Dollars in millions)
|
Trading Income
|
|
Mortgage
Production
Related
Income
1
|
|
Mortgage
Servicing
Related
Income
|
|
Total Changes
in Fair Values
Included in
Current
Period
Earnings
2
|
|
Trading
Income
|
|
Mortgage
Production Related
Income
1
|
|
Mortgage
Servicing
Related
Income
|
|
Total Changes
in Fair Values
Included in
Current
Period
Earnings
2
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading loans
|
|
$2
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$2
|
|
|
|
$6
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$6
|
|
LHFS
|
(1
|
)
|
|
(86
|
)
|
|
—
|
|
|
(87
|
)
|
|
1
|
|
|
(107
|
)
|
|
—
|
|
|
(106
|
)
|
||||||||
LHFI
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
||||||||
MSRs
|
—
|
|
|
1
|
|
|
81
|
|
|
82
|
|
|
—
|
|
|
2
|
|
|
98
|
|
|
100
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Brokered time deposits
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Long-term debt
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
Level 3 Significant Unobservable Input Assumptions
|
|||||||
(Dollars in millions)
|
Fair value
June 30, 2014 |
|
Valuation Technique
|
|
Unobservable Input
1
|
|
Range
(weighted average)
|
|
Assets
|
|
|
|
|
|
|
|
|
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
Derivative contracts, net
2
|
$21
|
|
Internal model
|
|
Pull through rate
|
|
8-100% (71%)
|
|
|
MSR value
|
|
43-212 bps (106 bps)
|
|||||
Securities AFS:
|
|
|
|
|
|
|
|
|
U.S. states and political subdivisions
|
12
|
|
|
Cost
|
|
N/A
|
|
|
MBS - private
|
140
|
|
|
Third party pricing
|
|
N/A
|
|
|
ABS
|
22
|
|
|
Third party pricing
|
|
N/A
|
|
|
Corporate and other debt securities
|
5
|
|
|
Cost
|
|
N/A
|
|
|
Other equity securities
|
779
|
|
|
Cost
|
|
N/A
|
|
|
Residential LHFS
|
3
|
|
|
Monte Carlo/Discounted cash flow
|
|
Option adjusted spread
|
|
145-165 bps (150 bps)
|
Conditional prepayment rate
|
0-30 CPR (16.5 CPR)
|
|||||||
Conditional default rate
|
0-3 CDR (0.5 CDR)
|
|||||||
LHFI
|
285
|
|
|
Monte Carlo/Discounted cash flow
|
|
Option adjusted spread
|
|
0-450 bps (290 bps)
|
Conditional prepayment rate
|
2-30 CPR (11.5 CPR)
|
|||||||
Conditional default rate
|
0-7 CDR (1.75 CDR)
|
|||||||
7
|
|
Collateral based pricing
|
Appraised value
|
NM
3
|
||||
MSRs
|
1,259
|
|
|
Discounted cash flow
|
|
Conditional prepayment rate
|
|
6-18 CPR (9 CPR)
|
|
Discount rate
|
|
8-24% (11%)
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
Other liabilities
4
|
24
|
|
|
Internal model
|
|
Loan production volume
|
|
0-150% (92%)
|
3
|
|
|
Internal model
|
|
Revenue run rate
|
|
NM
3
|
|
Level 3 Significant Unobservable Input Assumptions
|
||||||||
(Dollars in millions)
|
Fair value
December 31, 2013 |
|
Valuation Technique
|
|
Unobservable Input
1
|
|
Range
(weighted average)
|
||
Assets
|
|
|
|
|
|
|
|
||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
||
CDO/CLO securities
|
|
$54
|
|
|
Matrix pricing/Discounted cash flow
|
|
Indicative pricing based on overcollateralization ratio
|
|
$50-$60 ($54)
|
|
Discount margin
|
|
4-6% (5%)
|
||||||
ABS
|
6
|
|
|
Matrix pricing
|
|
Indicative pricing
|
|
$55 ($55)
|
|
Derivative contracts, net
2
|
8
|
|
|
Internal model
|
|
Pull through rate
|
|
1-99% (74%)
|
|
|
MSR value
|
|
42-222 bps (111 bps)
|
||||||
Securities AFS:
|
|
|
|
|
|
|
|
||
U.S. states and political subdivisions
|
34
|
|
|
Matrix pricing
|
|
Indicative pricing
|
|
$80-$111 ($95)
|
|
MBS - private
|
154
|
|
|
Third party pricing
|
|
N/A
|
|
|
|
ABS
|
21
|
|
|
Third party pricing
|
|
N/A
|
|
|
|
Corporate and other debt securities
|
5
|
|
|
Cost
|
|
N/A
|
|
|
|
Other equity securities
|
739
|
|
|
Cost
|
|
N/A
|
|
|
|
Residential LHFS
|
3
|
|
|
Monte Carlo/Discounted cash flow
|
|
Option adjusted spread
|
|
250-675 bps (277 bps)
|
|
|
Conditional prepayment rate
|
|
2-10 CPR (7 CPR)
|
||||||
|
Conditional default rate
|
|
0-4 CDR (0.5 CDR)
|
||||||
LHFI
|
292
|
|
|
Monte Carlo/Discounted cash flow
|
|
Option adjusted spread
|
|
0-675 bps (307 bps)
|
|
|
Conditional prepayment rate
|
|
1-30 CPR (13 CPR)
|
||||||
|
Conditional default rate
|
|
0-7 CDR (2.5 CDR)
|
||||||
10
|
|
|
Collateral based pricing
|
|
Appraised value
|
|
NM
3
|
||
MSRs
|
1,300
|
|
|
Discounted cash flow
|
|
Conditional prepayment rate
|
|
4-25 CPR (8 CPR)
|
|
|
Discount rate
|
|
9-28% (12%)
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||
Other liabilities
4
|
23
|
|
|
Internal model
|
|
Loan production volume
|
|
0-150% (92%)
|
|
3
|
|
|
Internal model
|
|
Revenue run rate
|
|
NM
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Fair Value Measurements
Using Significant Unobservable Inputs
|
|
||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Beginning
balance April 1, 2014 |
|
Included
in earnings |
|
OCI
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
to/from other balance sheet line items |
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair value
June 30, 2014 |
|
Included in earnings (held at June 30, 2014)
1
|
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Derivative contracts, net
|
|
$11
|
|
|
|
$72
|
|
2
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
($2
|
)
|
|
|
($60
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$21
|
|
|
|
($6
|
)
|
2
|
Securities AFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. states and political subdivisions
|
13
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
|||||||||||
MBS - private
|
149
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
|||||||||||
ABS
|
21
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
|||||||||||
Corporate and other debt securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
|||||||||||
Other equity securities
|
712
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
779
|
|
|
—
|
|
|
|||||||||||
Total securities AFS
|
900
|
|
|
—
|
|
4
|
2
|
|
5
|
135
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
958
|
|
|
—
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential LHFS
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
6
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
|||||||||||
LHFI
|
299
|
|
|
4
|
|
6
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
2
|
|
6
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other liabilities
|
26
|
|
|
1
|
|
7
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
|
Fair Value Measurements
Using Significant Unobservable Inputs
|
|
||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Beginning
balance January 1, 2014 |
|
Included
in earnings |
|
OCI
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
to/from other balance sheet line items |
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair value
June 30, 2014 |
|
Included in earnings (held at June 30, 2014)
1
|
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
CDO/CLO securities
|
|
$54
|
|
|
|
$11
|
|
3
|
|
$—
|
|
|
|
$—
|
|
|
|
($65
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
ABS
|
6
|
|
|
1
|
|
3
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||
Derivative contracts, net
|
8
|
|
|
133
|
|
2
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(6
|
)
|
2
|
|||||||||||
Total trading assets and derivatives
|
68
|
|
|
145
|
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
1
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(6
|
)
|
|
|||||||||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. states and political subdivisions
|
34
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
|||||||||||
MBS - private
|
154
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
|||||||||||
ABS
|
21
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
|||||||||||
Corporate and other debt securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
|||||||||||
Other equity securities
|
739
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
779
|
|
|
—
|
|
|
|||||||||||
Total securities AFS
|
953
|
|
|
(2
|
)
|
4
|
6
|
|
5
|
135
|
|
|
(20
|
)
|
|
(114
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
958
|
|
|
—
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential LHFS
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(6
|
)
|
|
11
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
|||||||||||
LHFI
|
302
|
|
|
8
|
|
6
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
5
|
|
6
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other liabilities
|
29
|
|
|
1
|
|
7
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Fair Value Measurements
Using Significant Unobservable Inputs
|
|
||||||||||||||||||||||||||||||||||||||||||
(Dollars in
millions)
|
Beginning
balance April 1, 2013 |
|
Included
in earnings |
|
OCI
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
to/from other balance sheet line items |
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair value
June 30, 2013 |
|
Included in earnings (held at June
30, 2013)
1
|
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
CDO/CLO securities
|
|
$61
|
|
|
|
$2
|
|
3
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$63
|
|
|
|
$2
|
|
3
|
ABS
|
5
|
|
|
1
|
|
3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
1
|
|
3
|
|||||||||||
Derivative contracts, net
|
99
|
|
|
(76
|
)
|
2
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
1
|
|
2
|
|||||||||||
Corporate and other debt securities
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||
Total trading assets and derivatives
|
166
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
4
|
|
|
|||||||||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. states and political subdivisions
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
|||||||||||
MBS - private
|
202
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
|||||||||||
ABS
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
|||||||||||
Corporate and other debt securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
|||||||||||
Other equity securities
|
672
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
737
|
|
|
—
|
|
|
|||||||||||
Total securities AFS
|
949
|
|
|
—
|
|
|
(6
|
)
|
5
|
65
|
|
|
(6
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|
—
|
|
|
|||||||||||
Residential LHFS
|
6
|
|
|
(1
|
)
|
6
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
10
|
|
|
(2
|
)
|
|
8
|
|
|
(1
|
)
|
6
|
|||||||||||
LHFI
|
360
|
|
|
(7
|
)
|
6
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
(7
|
)
|
6
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other liabilities
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
|
Fair Value Measurements
Using Significant Unobservable Inputs
|
|
||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Beginning
balance January 1, 2013 |
|
Included
in earnings |
|
OCI
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
to/from other balance sheet line items |
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair value
June 30, 2013 |
|
Included in earnings (held at June 30,
2013)
1
|
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Trading assets and derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
CDO/CLO securities
|
|
$52
|
|
|
|
$11
|
|
3
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$63
|
|
|
|
$11
|
|
3
|
ABS
|
5
|
|
|
1
|
|
3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
1
|
|
3
|
|||||||||||
Derivative contracts, net
|
132
|
|
|
26
|
|
2
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
1
|
|
2
|
|||||||||||
Corporate and other debt securities
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||
Total trading assets and derivatives
|
190
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
13
|
|
|
|||||||||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. states and political subdivisions
|
46
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
|||||||||||
MBS - private
|
209
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
|||||||||||
ABS
|
21
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
(1
|
)
|
|
|||||||||||
Corporate and other debt securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
|||||||||||
Other equity securities
|
633
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
737
|
|
|
—
|
|
|
|||||||||||
Total securities AFS
|
914
|
|
|
(1
|
)
|
4
|
2
|
|
5
|
110
|
|
|
(7
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|
(1
|
)
|
4
|
|||||||||||
Residential LHFS
|
8
|
|
|
(1
|
)
|
6
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(4
|
)
|
|
21
|
|
|
(3
|
)
|
|
8
|
|
|
(1
|
)
|
6
|
|||||||||||
LHFI
|
379
|
|
|
(12
|
)
|
6
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
(11
|
)
|
6
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other liabilities
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
(Dollars in millions)
|
June 30, 2014
|
|
Quoted Prices in
Active Markets
for Identical
Assets/Liabilities
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Losses for the Three
Months Ended
June 30, 2014
|
|
Gains/(Losses) for
the Six
Months Ended
June 30, 2014
|
||||||||||||
LHFS
|
|
$16
|
|
|
|
$—
|
|
|
|
$16
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$1
|
|
LHFI
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||||
OREO
|
44
|
|
|
—
|
|
|
3
|
|
|
41
|
|
|
(6
|
)
|
|
(8
|
)
|
||||||
Affordable Housing
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
(36
|
)
|
||||||
Other Assets
|
85
|
|
|
—
|
|
|
79
|
|
|
6
|
|
|
(7
|
)
|
|
(13
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Dollars in millions)
|
December 31, 2013
|
|
Quoted Prices in
Active Markets
for Identical
Assets/Liabilities
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Losses for the
Year Ended December 31, 2013 |
|
|
||||||||||||
LHFS
|
|
$278
|
|
|
|
$—
|
|
|
|
$278
|
|
|
|
$—
|
|
|
|
($3
|
)
|
|
|
||
LHFI
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
|
|||||||
OREO
|
49
|
|
|
—
|
|
|
1
|
|
|
48
|
|
|
(10
|
)
|
|
|
|||||||
Affordable Housing
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
|
|||||||
Other Assets
|
171
|
|
|
—
|
|
|
158
|
|
|
13
|
|
|
(61
|
)
|
|
|
|
June 30, 2014
|
|
Fair Value Measurement Using
|
|
||||||||||||||||
(Dollars in millions)
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets/Liabilities (Level 1) |
|
Significant
Other Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$6,859
|
|
|
|
$6,859
|
|
|
|
$6,859
|
|
|
|
$—
|
|
|
|
$—
|
|
(a)
|
Trading assets and derivatives
|
5,141
|
|
|
5,141
|
|
|
972
|
|
|
4,140
|
|
|
29
|
|
(b)
|
|||||
Securities AFS
|
24,015
|
|
|
24,015
|
|
|
1,727
|
|
|
21,330
|
|
|
958
|
|
(b)
|
|||||
LHFS
|
4,046
|
|
|
4,117
|
|
|
—
|
|
|
3,896
|
|
|
221
|
|
(c)
|
|||||
LHFI, net
|
127,741
|
|
|
123,778
|
|
|
—
|
|
|
575
|
|
|
123,203
|
|
(d)
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
133,285
|
|
|
133,286
|
|
|
—
|
|
|
133,286
|
|
|
—
|
|
(e)
|
|||||
Short-term borrowings
|
9,115
|
|
|
9,115
|
|
|
—
|
|
|
9,115
|
|
|
—
|
|
(f)
|
|||||
Long-term debt
|
13,155
|
|
|
13,261
|
|
|
—
|
|
|
12,537
|
|
|
724
|
|
(f)
|
|||||
Trading liabilities and derivatives
|
1,190
|
|
|
1,190
|
|
|
987
|
|
|
195
|
|
|
8
|
|
(b)
|
|
December 31, 2013
|
|
Fair Value Measurement Using
|
|
||||||||||||||||
(Dollars in millions)
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets/Liabilities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$5,263
|
|
|
|
$5,263
|
|
|
|
$5,263
|
|
|
|
$—
|
|
|
|
$—
|
|
(a)
|
Trading assets and derivatives
|
5,040
|
|
|
5,040
|
|
|
1,156
|
|
|
3,812
|
|
|
72
|
|
(b)
|
|||||
Securities AFS
|
22,542
|
|
|
22,542
|
|
|
1,396
|
|
|
20,193
|
|
|
953
|
|
(b)
|
|||||
LHFS
|
1,699
|
|
|
1,700
|
|
|
—
|
|
|
1,666
|
|
|
34
|
|
(c)
|
|||||
LHFI, net
|
125,833
|
|
|
121,341
|
|
|
—
|
|
|
2,860
|
|
|
118,481
|
|
(d)
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
129,759
|
|
|
129,801
|
|
|
—
|
|
|
129,801
|
|
|
—
|
|
(e)
|
|||||
Short-term borrowings
|
8,739
|
|
|
8,739
|
|
|
—
|
|
|
8,739
|
|
|
—
|
|
(f)
|
|||||
Long-term debt
|
10,700
|
|
|
10,678
|
|
|
—
|
|
|
10,086
|
|
|
592
|
|
(f)
|
|||||
Trading liabilities and derivatives
|
1,181
|
|
|
1,181
|
|
|
979
|
|
|
198
|
|
|
4
|
|
(b)
|
(a)
|
Cash and cash equivalents are valued at their carrying amounts reported in the balance sheet, which are reasonable estimates of fair value due to the relatively short period to maturity of the instruments.
|
(b)
|
Securities
AFS
, trading assets and derivatives, and trading liabilities and derivatives that are classified as level 1 are valued based on quoted market prices. For those instruments classified as level 2 or 3, refer to the respective valuation discussions within this footnote.
|
(c)
|
LHFS
are generally valued based on observable current market prices or, if quoted market prices are not available, on quoted market prices of similar instruments. Refer to the
LHFS
section within this footnote for further discussion of the
LHFS
carried at fair value. In instances for which significant valuation assumptions are not readily observable in the market, instruments are valued based on the best available data to approximate fair value. This data may be internally-developed and considers risk premiums that a market participant would require under then-current market conditions.
|
(d)
|
LHFI
fair values are based on a hypothetical exit price, which does not represent the estimated intrinsic value of the loan if held for investment. The assumptions used are expected to approximate those that a market participant purchasing the loans would use to value the loans, including a market risk premium and liquidity discount. Estimating the fair value of the loan portfolio when loan sales and trading markets are illiquid, or for certain loan types, nonexistent, requires significant judgment. Therefore, the estimated fair value can vary significantly depending on a market
|
(e)
|
Deposit liabilities with no defined maturity such as
DDA
s,
NOW
/money market accounts, and savings accounts have a fair value equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for
CD
s are estimated using a discounted cash flow measurement that applies current interest rates to a schedule of aggregated expected maturities. The assumptions used in the discounted cash flow analysis are expected to approximate those that market participants would use in valuing deposits. The value of long-term relationships with depositors is not taken into account in estimating fair values. For valuation of brokered time deposits that the
Company
carries at fair value as well as those that are carried at amortized cost, refer to the respective valuation section within this footnote.
|
(f)
|
Fair values for short-term borrowings and certain long-term debt are based on quoted market prices for similar instruments or estimated using discounted cash flow analysis and the
Company
’s current incremental borrowing rates for similar types of instruments. For long-term debt that the
Company
carries at fair value, refer to the respective valuation section within this footnote. For level 3 debt, the terms are unique in nature or there are otherwise no similar instruments that can be used to value the instrument without using significant unobservable assumptions. In this situation, the Company reviews current borrowing rates along with the collateral levels that secure the debt in determining an appropriate fair value adjustment.
|
•
|
Consumer Banking provides services to consumers and branch-managed small business clients through an extensive network of traditional and in-store branches,
ATM
s, the internet (
www.suntrust.com
), mobile banking, and telephone (1-800-SUNTRUST). Financial products and services offered to consumers and small business clients include deposits, home equity lines and loans, credit lines, indirect auto, student lending, bank card, other lending products, and various fee-based services. Consumer Banking also serves as an entry point for clients and provides services for other lines of business.
|
•
|
Private Wealth Management provides a full array of wealth management products and professional services to both individual and institutional clients including loans, deposits, brokerage, professional investment management, and trust services to clients seeking active management of their financial resources. Institutional clients are served by the Institutional Investment Solutions business. Discount/online and full service brokerage products are offered to individual clients through
STIS
. Private Wealth Management also includes
GenSpring
, which provides family office solutions to ultra-high net worth individuals and their families. Utilizing teams of multi-disciplinary specialists with expertise in investments, tax, accounting, estate planning, and other wealth management disciplines,
GenSpring
helps families manage and sustain wealth across multiple generations.
|
•
|
CIB
delivers comprehensive capital markets, corporate and investment banking solutions, including advisory, capital raising, and financial risk management, to clients in the Wholesale Banking segment and Private Wealth Management business. Investment Banking and Corporate Banking teams within
CIB
serve clients across the nation, offering a full suite of traditional banking and investment banking products and services to companies with annual revenues typically greater than $150 million. Investment Banking serves select industry segments including consumer and retail, energy, financial services, healthcare, industrials, media and communications, real estate, and technology. Corporate Banking serves clients across diversified industry sectors based on size, complexity, and frequency of capital markets issuance. Also managed within
CIB
is the Equipment Finance Group, which provides lease financing solutions (through SunTrust Equipment Finance & Leasing).
|
•
|
Commercial & Business Banking offers an array of traditional banking products and investment banking services as needed by Commercial clients with annual revenues generally from $1 million to $150 million as well as the dealer services (financing dealer floor plan inventories) and not-for-profit and government sectors. Also managed within the Commercial Bank is the Premium Assignment Corporation, which create corporate insurance premium financing solutions.
|
•
|
Commercial Real Estate provides a full range of financial solutions for commercial real estate developers, owners and investors including construction, mini-perm, and permanent real estate financing as well as tailored financing and equity investment solutions via
STRH
primarily through the
REIT
group focused on Real Estate Investment Trusts. The Institutional Real Estate team targets relationships with institutional advisors, private funds, sovereign wealth funds, and insurance companies and the Regional team focuses on real estate owners and developers through a regional delivery structure. Commercial Real Estate also offers tailored financing and equity investment solutions for community development and affordable housing owners/developers projects through
SunTrust Community Capital
with special expertise in Low Income Housing Tax Credits and New Market Tax Credits.
|
•
|
Treasury & Payment Solutions provides all
SunTrust
business clients with services required to manage their payments and receipts combined with the ability to manage and optimize their deposits across all aspects of their business. Treasury & Payment Solutions operates all electronic and paper payment types, including card, wire transfer,
ACH
, check, and cash, plus provides clients the means to manage their accounts electronically online both domestically and internationally.
|
•
|
Net interest income
– Net interest income is presented on a
FTE
basis to make tax-exempt assets comparable to other taxable products. The segments have also been matched maturity funds transfer priced, generating credits or charges based on the economic value or cost created by the assets and liabilities of each segment. The mismatch between funds credits and funds charges at the segment level resides in Reconciling Items. The change in the matched maturity funds mismatch is generally attributable to corporate balance sheet management strategies.
|
•
|
Provision for credit losses
– Represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to each segment's quarterly change in the
ALLL
and unfunded commitment reserve balances.
|
•
|
Provision/(benefit) for income taxes
– Calculated using a blended income tax rate for each segment. This calculation includes the impact of various income adjustments, such as the reversal of the
FTE
gross up on tax-exempt assets, tax adjustments, and credits that are unique to each segment. The difference between the calculated provision/(benefit) for income taxes at the segment level and the consolidated provision/(benefit) for income taxes is reported in Reconciling Items.
|
•
|
Operational Costs
– Expenses are charged to the segments based on various statistical volumes multiplied by activity based cost rates. As a result of the activity based costing process, planned residual expenses are also allocated to the segments. The recoveries for the majority of these costs are in Corporate Other.
|
•
|
Support and Overhead Costs
– Expenses not directly attributable to a specific segment are allocated based on various drivers (e.g., number of full-time equivalent employees and volume of loans and deposits). The recoveries for these allocations are in Corporate Other.
|
•
|
Sales and Referral Credits
– Segments may compensate another segment for referring or selling certain products. The majority of the revenue resides in the segment where the product is ultimately managed.
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||||||||
(Dollars in millions)
|
Consumer
Banking and Private Wealth Management |
|
Wholesale Banking
|
|
Mortgage Banking
|
|
Corporate Other
|
|
Reconciling
Items |
|
Consolidated
|
||||||||||||
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average total assets
|
|
$47,204
|
|
|
|
$72,684
|
|
|
|
$31,251
|
|
|
|
$25,969
|
|
|
|
$2,712
|
|
|
|
$179,820
|
|
Average total liabilities
|
86,176
|
|
|
49,613
|
|
|
2,762
|
|
|
19,271
|
|
|
4
|
|
|
157,826
|
|
||||||
Average total equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,994
|
|
|
21,994
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statements of Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$651
|
|
|
|
$415
|
|
|
|
$140
|
|
|
|
$72
|
|
|
|
($69
|
)
|
|
|
$1,209
|
|
FTE adjustment
|
—
|
|
|
34
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
35
|
|
||||||
Net interest income - FTE
1
|
651
|
|
|
449
|
|
|
140
|
|
|
73
|
|
|
(69
|
)
|
|
1,244
|
|
||||||
Provision for credit losses
2
|
42
|
|
|
7
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||
Net interest income after provision for credit losses
|
609
|
|
|
442
|
|
|
116
|
|
|
73
|
|
|
(69
|
)
|
|
1,171
|
|
||||||
Total noninterest income
|
381
|
|
|
312
|
|
|
119
|
|
|
150
|
|
|
(5
|
)
|
|
957
|
|
||||||
Total noninterest expense
|
734
|
|
|
385
|
|
|
367
|
|
|
34
|
|
|
(3
|
)
|
|
1,517
|
|
||||||
Income/(loss) before provision/(benefit) for income taxes
|
256
|
|
|
369
|
|
|
(132
|
)
|
|
189
|
|
|
(71
|
)
|
|
611
|
|
||||||
Provision/(benefit) for income taxes
3
|
94
|
|
|
124
|
|
|
(48
|
)
|
|
65
|
|
|
(27
|
)
|
|
208
|
|
||||||
Net income/(loss) including income attributable to noncontrolling interest
|
162
|
|
|
245
|
|
|
(84
|
)
|
|
124
|
|
|
(44
|
)
|
|
403
|
|
||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(1
|
)
|
|
4
|
|
||||||
Net income/(loss)
|
|
$162
|
|
|
|
$245
|
|
|
|
($84
|
)
|
|
|
$119
|
|
|
|
($43
|
)
|
|
|
$399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2013
|
||||||||||||||||||||||
(Dollars in millions)
|
Consumer
Banking and Private Wealth Management |
|
Wholesale Banking
|
|
Mortgage Banking
|
|
Corporate Other
|
|
Reconciling
Items |
|
Consolidated
|
||||||||||||
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average total assets
|
|
$45,262
|
|
|
|
$65,776
|
|
|
|
$32,711
|
|
|
|
$27,352
|
|
|
|
$1,436
|
|
|
|
$172,537
|
|
Average total liabilities
|
85,102
|
|
|
45,906
|
|
|
4,429
|
|
|
15,953
|
|
|
(125
|
)
|
|
151,265
|
|
||||||
Average total equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,272
|
|
|
21,272
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statements of Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$648
|
|
|
|
$395
|
|
|
|
$141
|
|
|
|
$74
|
|
|
|
($47
|
)
|
|
|
$1,211
|
|
FTE adjustment
|
—
|
|
|
30
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
31
|
|
||||||
Net interest income - FTE
1
|
648
|
|
|
425
|
|
|
141
|
|
|
75
|
|
|
(47
|
)
|
|
1,242
|
|
||||||
Provision for credit losses
2
|
85
|
|
|
12
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
146
|
|
||||||
Net interest income after provision for credit losses
|
563
|
|
|
413
|
|
|
92
|
|
|
75
|
|
|
(47
|
)
|
|
1,096
|
|
||||||
Total noninterest income
|
370
|
|
|
288
|
|
|
131
|
|
|
72
|
|
|
(3
|
)
|
|
858
|
|
||||||
Total noninterest expense
|
692
|
|
|
359
|
|
|
340
|
|
|
1
|
|
|
(5
|
)
|
|
1,387
|
|
||||||
Income/(loss) before provision/(benefit) for income taxes
|
241
|
|
|
342
|
|
|
(117
|
)
|
|
146
|
|
|
(45
|
)
|
|
567
|
|
||||||
Provision/(benefit) for income taxes
3
|
89
|
|
|
114
|
|
|
(48
|
)
|
|
47
|
|
|
(15
|
)
|
|
187
|
|
||||||
Net income/(loss) including income attributable to noncontrolling interest
|
152
|
|
|
228
|
|
|
(69
|
)
|
|
99
|
|
|
(30
|
)
|
|
380
|
|
||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
Net income/(loss)
|
|
$152
|
|
|
|
$228
|
|
|
|
($69
|
)
|
|
|
$96
|
|
|
|
($30
|
)
|
|
|
$377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||||||
(Dollars in millions)
|
Consumer
Banking and Private Wealth Management |
|
Wholesale Banking
|
|
Mortgage Banking
|
|
Corporate Other
|
|
Reconciling
Items |
|
Consolidated
|
||||||||||||
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average total assets
|
|
$47,076
|
|
|
|
$71,367
|
|
|
|
$31,400
|
|
|
|
$25,795
|
|
|
|
$2,766
|
|
|
|
$178,404
|
|
Average total liabilities
|
85,760
|
|
|
49,219
|
|
|
2,600
|
|
|
18,989
|
|
|
(25
|
)
|
|
156,543
|
|
||||||
Average total equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,861
|
|
|
21,861
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statements of Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$1,296
|
|
|
|
$810
|
|
|
|
$274
|
|
|
|
$147
|
|
|
|
($113
|
)
|
|
|
$2,414
|
|
FTE adjustment
|
—
|
|
|
68
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
69
|
|
||||||
Net interest income - FTE
1
|
1,296
|
|
|
878
|
|
|
274
|
|
|
149
|
|
|
(114
|
)
|
|
2,483
|
|
||||||
Provision for credit losses
2
|
95
|
|
|
30
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||||
Net interest income after provision for credit losses
|
1,201
|
|
|
848
|
|
|
224
|
|
|
149
|
|
|
(114
|
)
|
|
2,308
|
|
||||||
Total noninterest income
|
743
|
|
|
586
|
|
|
219
|
|
|
209
|
|
|
(9
|
)
|
|
1,748
|
|
||||||
Total noninterest expense
|
1,446
|
|
|
802
|
|
|
556
|
|
|
77
|
|
|
(7
|
)
|
|
2,874
|
|
||||||
Income/(loss) before provision/(benefit) for income taxes
|
498
|
|
|
632
|
|
|
(113
|
)
|
|
281
|
|
|
(116
|
)
|
|
1,182
|
|
||||||
Provision/(benefit) for income taxes
3
|
183
|
|
|
209
|
|
|
(43
|
)
|
|
69
|
|
|
(51
|
)
|
|
367
|
|
||||||
Net income/(loss) including income attributable to noncontrolling interest
|
315
|
|
|
423
|
|
|
(70
|
)
|
|
212
|
|
|
(65
|
)
|
|
815
|
|
||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||
Net income/(loss)
|
|
$315
|
|
|
|
$423
|
|
|
|
($70
|
)
|
|
|
$201
|
|
|
|
($65
|
)
|
|
|
$804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30, 2013
|
||||||||||||||||||||||
(Dollars in millions)
|
Consumer
Banking and
Private Wealth
Management
|
|
Wholesale Banking
|
|
Mortgage Banking
|
|
Corporate Other
|
|
Reconciling
Items |
|
Consolidated
|
||||||||||||
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average total assets
|
|
$45,319
|
|
|
|
$65,354
|
|
|
|
$32,946
|
|
|
|
$27,052
|
|
|
|
$1,504
|
|
|
|
$172,175
|
|
Average total liabilities
|
85,449
|
|
|
46,162
|
|
|
4,383
|
|
|
15,112
|
|
|
(126
|
)
|
|
150,980
|
|
||||||
Average total equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,195
|
|
|
21,195
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statements of Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$1,297
|
|
|
|
$775
|
|
|
|
$268
|
|
|
|
$162
|
|
|
|
($70
|
)
|
|
|
$2,432
|
|
FTE adjustment
|
—
|
|
|
60
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
61
|
|
||||||
Net interest income - FTE
1
|
1,297
|
|
|
835
|
|
|
268
|
|
|
163
|
|
|
(70
|
)
|
|
2,493
|
|
||||||
Provision/(benefit) for credit losses
2
|
177
|
|
|
68
|
|
|
113
|
|
|
(1
|
)
|
|
1
|
|
|
358
|
|
||||||
Net interest income after provision/(benefit) for credit losses
|
1,120
|
|
|
767
|
|
|
155
|
|
|
164
|
|
|
(71
|
)
|
|
2,135
|
|
||||||
Total noninterest income
|
727
|
|
|
547
|
|
|
329
|
|
|
122
|
|
|
(4
|
)
|
|
1,721
|
|
||||||
Total noninterest expense
|
1,397
|
|
|
703
|
|
|
609
|
|
|
35
|
|
|
(4
|
)
|
|
2,740
|
|
||||||
Income/(loss) before provision/(benefit) for income taxes
|
450
|
|
|
611
|
|
|
(125
|
)
|
|
251
|
|
|
(71
|
)
|
|
1,116
|
|
||||||
Provision/(benefit) for income taxes
3
|
165
|
|
|
202
|
|
|
(52
|
)
|
|
78
|
|
|
(15
|
)
|
|
378
|
|
||||||
Net income/(loss) including income attributable to noncontrolling interest
|
285
|
|
|
409
|
|
|
(73
|
)
|
|
173
|
|
|
(56
|
)
|
|
738
|
|
||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Net income/(loss)
|
|
$285
|
|
|
|
$409
|
|
|
|
($73
|
)
|
|
|
$164
|
|
|
|
($56
|
)
|
|
|
$729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30
|
||||||||||||||||||||||
|
2014
|
|
2013
|
||||||||||||||||||||
(Dollars in millions)
|
Pre-tax Amount
|
|
Income Tax (Expense)/ Benefit
|
|
After-tax Amount
|
|
Pre-tax Amount
|
|
Income Tax (Expense)/ Benefit
|
|
After-tax Amount
|
||||||||||||
AOCI, beginning balance
|
|
($301
|
)
|
|
|
$101
|
|
|
|
($200
|
)
|
|
|
$310
|
|
|
|
($125
|
)
|
|
|
$185
|
|
Unrealized gains/(losses) on AFS securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized net gains/(losses)
|
276
|
|
|
(101
|
)
|
|
175
|
|
|
(605
|
)
|
|
223
|
|
|
(382
|
)
|
||||||
Less: Reclassification adjustment for realized net losses
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Unrealized gains/(losses) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized net gains/(losses)
|
44
|
|
|
(16
|
)
|
|
28
|
|
|
(45
|
)
|
|
18
|
|
|
(27
|
)
|
||||||
Less: Reclassification adjustment for realized net gains
|
(101
|
)
|
|
37
|
|
|
(64
|
)
|
|
(100
|
)
|
|
36
|
|
|
(64
|
)
|
||||||
Change related to employee benefit plans
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
8
|
|
|
(3
|
)
|
|
5
|
|
||||||
AOCI, ending balance
|
|
($78
|
)
|
|
|
$19
|
|
|
|
($59
|
)
|
|
|
($432
|
)
|
|
|
$149
|
|
|
|
($283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30
|
||||||||||||||||||||||
|
2014
|
|
2013
|
||||||||||||||||||||
(Dollars in millions)
|
Pre-tax
Amount
|
|
Income Tax
(Expense)/
Benefit
|
|
After-tax
Amount
|
|
Pre-tax Amount
|
|
Income Tax (Expense)/Benefit
|
|
After-tax Amount
|
||||||||||||
AOCI, beginning balance
|
|
($442
|
)
|
|
|
$153
|
|
|
|
($289
|
)
|
|
|
$506
|
|
|
|
($197
|
)
|
|
|
$309
|
|
Unrealized gains/(losses) on AFS securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized net gains/(losses)
|
447
|
|
|
(164
|
)
|
|
283
|
|
|
(718
|
)
|
|
264
|
|
|
(454
|
)
|
||||||
Less: Reclassification adjustment for realized net losses/(gains)
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
||||||
Unrealized gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized net gains/(losses)
|
67
|
|
|
(25
|
)
|
|
42
|
|
|
(45
|
)
|
|
17
|
|
|
(28
|
)
|
||||||
Less: Reclassification adjustment for realized net gains
|
(203
|
)
|
|
75
|
|
|
(128
|
)
|
|
(214
|
)
|
|
79
|
|
|
(135
|
)
|
||||||
Change related to employee benefit plans
|
51
|
|
|
(19
|
)
|
|
32
|
|
|
41
|
|
|
(15
|
)
|
|
26
|
|
||||||
AOCI, ending balance
|
|
($78
|
)
|
|
|
$19
|
|
|
|
($59
|
)
|
|
|
($432
|
)
|
|
|
$149
|
|
|
|
($283
|
)
|
(Dollars in millions)
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
|
Affected line item in the Consolidated Statements of Income
|
||||||||||||
Details about AOCI components
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|||||||||
Realized losses/(gains) on AFS securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
$1
|
|
|
|
$—
|
|
|
|
$2
|
|
|
|
($2
|
)
|
|
Net securities (losses)/gains
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
Provision for income taxes
|
||||
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$1
|
|
|
|
($1
|
)
|
|
|
Gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
($101
|
)
|
|
|
($100
|
)
|
|
|
($203
|
)
|
|
|
($214
|
)
|
|
Interest and fees on loans
|
|
|
37
|
|
|
36
|
|
|
75
|
|
|
79
|
|
|
Provision for income taxes
|
||||
|
|
|
($64
|
)
|
|
|
($64
|
)
|
|
|
($128
|
)
|
|
|
($135
|
)
|
|
|
Change related to employee benefit plans:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial losses
|
|
|
$3
|
|
|
|
$6
|
|
|
|
$5
|
|
|
|
$13
|
|
|
Employee benefits
|
|
|
—
|
|
|
2
|
|
|
46
|
|
|
28
|
|
|
Other assets/other liabilities
1
|
||||
|
|
3
|
|
|
8
|
|
|
51
|
|
|
41
|
|
|
|
||||
|
|
(1
|
)
|
|
(3
|
)
|
|
(19
|
)
|
|
(15
|
)
|
|
Provision for income taxes
|
||||
|
|
|
$2
|
|
|
|
$5
|
|
|
|
$32
|
|
|
|
$26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(Dollars in millions, except per share amounts)
|
June 30, 2014
|
|
June 30, 2014
|
||||
Net income available to common shareholders
|
|
$387
|
|
|
|
$780
|
|
Form 8-K and other legacy mortgage-related items impacting the periods:
|
|
|
|
||||
Operating losses related to settlement of HAMP
1
|
204
|
|
|
204
|
|
||
Gain on sale of RidgeWorth
2
|
(105
|
)
|
|
(105
|
)
|
||
Other legacy mortgage-related adjustments
|
(25
|
)
|
|
(25
|
)
|
||
Tax benefit related to above items
|
(25
|
)
|
|
(25
|
)
|
||
Net income available to common shareholders, excluding
Form 8-K and other legacy mortgage-related items impacting the periods
|
|
$436
|
|
|
|
$829
|
|
Net income per average common share, diluted
|
|
$0.72
|
|
|
|
$1.45
|
|
Net income per average common share, diluted, excluding
Form 8-K and other legacy mortgage-related items impacting the periods
|
|
$0.81
|
|
|
|
$1.54
|
|
SELECTED QUARTERLY FINANCIAL DATA AND RECONCILEMENT OF
NON-U.S. GAAP MEASURES
|
|
Table 1
|
|
||||||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions, except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Summary of Operations:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$1,346
|
|
|
|
$1,347
|
|
|
|
$2,683
|
|
|
|
$2,706
|
|
Interest expense
|
137
|
|
|
136
|
|
|
269
|
|
|
274
|
|
||||
Net interest income
|
1,209
|
|
|
1,211
|
|
|
2,414
|
|
|
2,432
|
|
||||
Provision for credit losses
|
73
|
|
|
146
|
|
|
175
|
|
|
358
|
|
||||
Net interest income after provision for credit losses
|
1,136
|
|
|
1,065
|
|
|
2,239
|
|
|
2,074
|
|
||||
Noninterest income
|
957
|
|
|
858
|
|
|
1,748
|
|
|
1,721
|
|
||||
Noninterest expense
1
|
1,517
|
|
|
1,387
|
|
|
2,874
|
|
|
2,740
|
|
||||
Income before provision for income taxes
|
576
|
|
|
536
|
|
|
1,113
|
|
|
1,055
|
|
||||
Provision for income taxes
1
|
173
|
|
|
156
|
|
|
298
|
|
|
317
|
|
||||
Net income attributable to noncontrolling interest
|
4
|
|
|
3
|
|
|
11
|
|
|
9
|
|
||||
Net income
|
|
$399
|
|
|
|
$377
|
|
|
|
$804
|
|
|
|
$729
|
|
Net income available to common shareholders
|
|
$387
|
|
|
|
$365
|
|
|
|
$780
|
|
|
|
$705
|
|
Net income available to common shareholders, excluding Form 8-K and other
legacy mortgage-related items
2
|
|
$436
|
|
|
|
$365
|
|
|
|
$829
|
|
|
|
$705
|
|
Net interest income - FTE
3
|
|
$1,244
|
|
|
|
$1,242
|
|
|
|
$2,483
|
|
|
|
$2,493
|
|
Total revenue - FTE
3
|
2,201
|
|
|
2,100
|
|
|
4,231
|
|
|
4,214
|
|
||||
Total revenue - FTE, excluding gain on sale of RidgeWorth
3, 4
|
2,096
|
|
|
2,100
|
|
|
4,126
|
|
|
4,214
|
|
||||
Net income per average common share:
|
|
|
|
|
|
|
|
||||||||
Diluted
|
0.72
|
|
|
0.68
|
|
|
1.45
|
|
|
1.31
|
|
||||
Diluted, excluding Form 8-K and other legacy mortgage-related items
2
|
0.81
|
|
|
0.68
|
|
|
1.54
|
|
|
1.31
|
|
||||
Basic
|
0.73
|
|
|
0.68
|
|
|
1.47
|
|
|
1.32
|
|
||||
Dividends paid per average common share
|
0.20
|
|
|
0.10
|
|
|
0.30
|
|
|
0.15
|
|
||||
Book value per common share
|
|
|
|
|
40.18
|
|
|
37.65
|
|
||||||
Tangible book value per common share
5
|
|
|
|
|
28.64
|
|
|
26.08
|
|
||||||
Selected Average Balances:
|
|
|
|
|
|
|
|
||||||||
Total assets
|
|
$179,820
|
|
|
|
$172,537
|
|
|
|
$178,404
|
|
|
|
$172,175
|
|
Earning assets
|
160,373
|
|
|
153,495
|
|
|
158,866
|
|
|
152,986
|
|
||||
Loans
|
130,734
|
|
|
121,372
|
|
|
129,635
|
|
|
121,128
|
|
||||
Consumer and commercial deposits
|
130,472
|
|
|
126,579
|
|
|
129,440
|
|
|
127,114
|
|
||||
Brokered time and foreign deposits
|
1,893
|
|
|
2,075
|
|
|
1,953
|
|
|
2,122
|
|
||||
Total shareholders’ equity
|
21,994
|
|
|
21,272
|
|
|
21,861
|
|
|
21,195
|
|
||||
Average common shares - diluted (thousands)
|
535,486
|
|
|
539,763
|
|
|
536,234
|
|
|
539,812
|
|
||||
Average common shares - basic (thousands)
|
529,764
|
|
|
535,172
|
|
|
530,459
|
|
|
535,425
|
|
||||
Financial Ratios (Annualized):
|
|
|
|
|
|
|
|
||||||||
ROA
|
0.89
|
%
|
|
0.88
|
%
|
|
0.91
|
%
|
|
0.85
|
%
|
||||
ROE
|
7.29
|
|
|
7.12
|
|
|
7.44
|
|
|
6.95
|
|
||||
ROTCE
6
|
10.29
|
|
|
10.35
|
|
|
10.53
|
|
|
10.12
|
|
||||
Net interest margin - FTE
3
|
3.11
|
|
|
3.25
|
|
|
3.15
|
|
|
3.29
|
|
||||
Efficiency ratio
7
|
68.93
|
|
|
66.07
|
|
|
67.92
|
|
|
65.02
|
|
||||
Tangible efficiency ratio
8
|
68.77
|
|
|
65.78
|
|
|
67.76
|
|
|
64.73
|
|
||||
Tangible efficiency ratio, excluding Form
8-K and other legacy mortgage-related items
2,8
|
63.69
|
|
|
65.78
|
|
|
65.15
|
|
|
64.73
|
|
||||
Total average shareholders’ equity to total average assets
|
12.23
|
|
|
12.33
|
|
|
12.25
|
|
|
12.31
|
|
||||
Tangible equity to tangible assets
9
|
|
|
|
|
9.07
|
|
|
8.95
|
|
||||||
Capital Adequacy:
|
|
|
|
|
|
|
|
||||||||
Tier 1 common equity
|
|
|
|
|
9.72
|
%
|
|
10.19
|
%
|
||||||
Tier 1 capital
|
|
|
|
|
10.66
|
|
|
11.24
|
|
||||||
Total capital
|
|
|
|
|
12.53
|
|
|
13.43
|
|
||||||
Tier 1 leverage
|
|
|
|
|
9.56
|
|
|
9.40
|
|
|
|
|
|
|
|
SELECTED QUARTERLY FINANCIAL DATA AND RECONCILEMENT OF
NON-U.S. GAAP MEASURES, continued
|
|
||||||||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions, except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Reconcilement of Non-U.S. GAAP Measures:
|
|
|
|
|
|
|
|
||||||||
Efficiency ratio
7
|
68.93
|
%
|
|
66.07
|
%
|
|
67.92
|
%
|
|
65.02
|
%
|
||||
Impact of excluding amortization of intangible assets
|
(0.16
|
)
|
|
(0.29
|
)
|
|
(0.16
|
)
|
|
(0.29
|
)
|
||||
Tangible efficiency ratio
8
|
68.77
|
%
|
|
65.78
|
%
|
|
67.76
|
%
|
|
64.73
|
%
|
||||
Impact of excluding Form 8-K and other legacy mortgage-related items
|
(5.08
|
)
|
|
—
|
|
|
(2.61
|
)
|
|
—
|
|
||||
Tangible efficiency ratio, excluding Form
8-K and other legacy mortgage-related items
2,8
|
63.69
|
%
|
|
65.78
|
%
|
|
65.15
|
%
|
|
64.73
|
%
|
||||
ROE
|
7.29
|
%
|
|
7.12
|
%
|
|
7.44
|
%
|
|
6.95
|
%
|
||||
Impact of removing average intangible assets (net of deferred taxes), excluding MSRs, from average common shareholders' equity
|
3.00
|
|
|
3.23
|
|
|
3.09
|
|
|
3.17
|
|
||||
ROTCE
6
|
10.29
|
%
|
|
10.35
|
%
|
|
10.53
|
%
|
|
10.12
|
%
|
||||
Net interest income
|
|
$1,209
|
|
|
|
$1,211
|
|
|
|
$2,414
|
|
|
|
$2,432
|
|
Taxable-equivalent adjustment
|
35
|
|
|
31
|
|
|
69
|
|
|
61
|
|
||||
Net interest income - FTE
3
|
1,244
|
|
|
1,242
|
|
|
2,483
|
|
|
2,493
|
|
||||
Noninterest income
|
957
|
|
|
858
|
|
|
1,748
|
|
|
1,721
|
|
||||
Total revenue - FTE
3
|
2,201
|
|
|
2,100
|
|
|
4,231
|
|
|
4,214
|
|
||||
Gain on sale of RidgeWorth
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
||||
Total revenue - FTE, excluding gain on sale of RidgeWorth
3, 4
|
|
$2,096
|
|
|
|
$2,100
|
|
|
|
$4,126
|
|
|
|
$4,214
|
|
Noninterest income
|
|
$957
|
|
|
|
$858
|
|
|
|
$1,748
|
|
|
|
$1,721
|
|
Gain on sale of RidgeWorth
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
||||
Noninterest income, excluding gain on sale of RidgeWorth
4
|
|
$852
|
|
|
|
$858
|
|
|
|
$1,643
|
|
|
|
$1,721
|
|
|
|
|
|
|
|
|
|
||||||||
|
June 30, 2014
|
|
June 30, 2013
|
|
|
|
|
||||||||
Total shareholders’ equity
|
|
$22,131
|
|
|
|
$21,007
|
|
|
|
|
|
||||
Goodwill, net of deferred taxes
10
|
(6,131
|
)
|
|
(6,195
|
)
|
|
|
|
|
||||||
Other intangible assets, net of deferred taxes, and MSRs
11
|
(1,276
|
)
|
|
(1,240
|
)
|
|
|
|
|
||||||
MSRs
|
1,259
|
|
|
1,199
|
|
|
|
|
|
||||||
Tangible equity
|
15,983
|
|
|
14,771
|
|
|
|
|
|
||||||
Preferred stock
|
(725
|
)
|
|
(725
|
)
|
|
|
|
|
||||||
Tangible common equity
|
|
$15,258
|
|
|
|
$14,046
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total assets
|
|
$182,559
|
|
|
|
$171,546
|
|
|
|
|
|
||||
Goodwill
|
(6,337
|
)
|
|
(6,369
|
)
|
|
|
|
|
||||||
Other intangible assets including MSRs
|
(1,277
|
)
|
|
(1,244
|
)
|
|
|
|
|
||||||
MSRs
|
1,259
|
|
|
1,199
|
|
|
|
|
|
||||||
Tangible assets
|
|
$176,204
|
|
|
|
$165,132
|
|
|
|
|
|
||||
Tangible equity to tangible assets
9
|
9.07
|
%
|
|
8.95
|
%
|
|
|
|
|
||||||
Tangible book value per common share
5
|
|
$28.64
|
|
|
|
$26.08
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total loans
|
|
$129,744
|
|
|
|
$122,031
|
|
|
|
|
|
||||
Government guaranteed loans
|
(6,081
|
)
|
|
(9,053
|
)
|
|
|
|
|
||||||
Loans held at fair value
|
(292
|
)
|
|
(339
|
)
|
|
|
|
|
||||||
Total loans, excluding government
guaranteed and fair value loans
|
|
$123,371
|
|
|
|
$112,639
|
|
|
|
|
|
||||
Allowance to total loans, excluding
government guaranteed and fair value loans
12
|
1.62
|
%
|
|
1.89
|
%
|
|
|
|
|
SELECTED QUARTERLY FINANCIAL DATA AND RECONCILEMENT OF
NON-U.S. GAAP MEASURES, continued |
|
|
|||||||||||||||||
|
As Reported
|
|
|
|
Excluding Form 8-K and other legacy mortgage-related items
2
|
||||||||||||||
(Dollars in millions, except per share data)
|
June 30, 2014
|
|
|
|
June 30, 2014
|
||||||||||||||
Three Months Ended
|
|
Six Months Ended
|
|
Adjustments
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||
Net interest income
|
|
$1,209
|
|
|
|
$2,414
|
|
|
|
$—
|
|
|
|
$1,209
|
|
|
|
$2,414
|
|
Provision for credit losses
|
73
|
|
|
175
|
|
|
—
|
|
|
73
|
|
|
175
|
|
|||||
Net interest income after provision
for credit losses
|
1,136
|
|
|
2,239
|
|
|
—
|
|
|
1,136
|
|
|
2,239
|
|
|||||
Noninterest Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Service charges on deposit accounts
|
160
|
|
|
314
|
|
|
—
|
|
|
160
|
|
|
314
|
|
|||||
Other charges and fees
|
91
|
|
|
179
|
|
|
—
|
|
|
91
|
|
|
179
|
|
|||||
Card fees
|
82
|
|
|
158
|
|
|
—
|
|
|
82
|
|
|
158
|
|
|||||
Trust and investment management income
|
116
|
|
|
247
|
|
|
—
|
|
|
116
|
|
|
247
|
|
|||||
Retail investment services
|
76
|
|
|
147
|
|
|
—
|
|
|
76
|
|
|
147
|
|
|||||
Investment banking income
|
119
|
|
|
207
|
|
|
—
|
|
|
119
|
|
|
207
|
|
|||||
Trading income
|
47
|
|
|
96
|
|
|
—
|
|
|
47
|
|
|
96
|
|
|||||
Mortgage production related income
|
52
|
|
|
95
|
|
|
—
|
|
|
52
|
|
|
95
|
|
|||||
Mortgage servicing related income
|
45
|
|
|
99
|
|
|
—
|
|
|
45
|
|
|
99
|
|
|||||
Gain on sale of subsidiary
|
105
|
|
|
105
|
|
|
105
|
|
13
|
—
|
|
|
—
|
|
|||||
Net securities (losses)/gains
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Other noninterest income
|
65
|
|
|
103
|
|
|
—
|
|
|
65
|
|
|
103
|
|
|||||
Total noninterest income
|
957
|
|
|
1,748
|
|
|
105
|
|
|
852
|
|
|
1,643
|
|
|||||
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation
|
659
|
|
|
1,319
|
|
|
—
|
|
|
659
|
|
|
1,319
|
|
|||||
Employee benefits
|
104
|
|
|
244
|
|
|
—
|
|
|
104
|
|
|
244
|
|
|||||
Operating losses
|
218
|
|
|
239
|
|
|
179
|
|
14
|
39
|
|
|
60
|
|
|||||
Outside processing and software
|
181
|
|
|
351
|
|
|
—
|
|
|
181
|
|
|
351
|
|
|||||
Net occupancy expense
|
83
|
|
|
169
|
|
|
—
|
|
|
83
|
|
|
169
|
|
|||||
Equipment expense
|
42
|
|
|
86
|
|
|
—
|
|
|
42
|
|
|
86
|
|
|||||
Regulatory assessments
|
40
|
|
|
80
|
|
|
—
|
|
|
40
|
|
|
80
|
|
|||||
Marketing and customer development
|
30
|
|
|
56
|
|
|
—
|
|
|
30
|
|
|
56
|
|
|||||
Credit and collection services
|
23
|
|
|
46
|
|
|
—
|
|
|
23
|
|
|
46
|
|
|||||
Amortization of intangible assets
|
4
|
|
|
7
|
|
|
—
|
|
|
4
|
|
|
7
|
|
|||||
Other noninterest expense
|
133
|
|
|
277
|
|
|
—
|
|
|
133
|
|
|
277
|
|
|||||
Total noninterest expense
|
1,517
|
|
|
2,874
|
|
|
179
|
|
|
1,338
|
|
|
2,695
|
|
|||||
Income before provision for income taxes
|
576
|
|
|
1,113
|
|
|
(74
|
)
|
|
650
|
|
|
1,187
|
|
|||||
Provision for income taxes
|
173
|
|
|
298
|
|
|
(25
|
)
|
15
|
198
|
|
|
323
|
|
|||||
Income including income attributable to noncontrolling interest
|
403
|
|
|
815
|
|
|
(49
|
)
|
|
452
|
|
|
864
|
|
|||||
Net income attributable to noncontrolling interest
|
4
|
|
|
11
|
|
|
—
|
|
|
4
|
|
|
11
|
|
|||||
Net income
|
|
$399
|
|
|
|
$804
|
|
|
|
($49
|
)
|
|
|
$448
|
|
|
|
$853
|
|
Net income available to common shareholders
|
|
$387
|
|
|
|
$780
|
|
|
|
($49
|
)
|
|
|
$436
|
|
|
|
$829
|
|
Net income per average common share - diluted
|
|
$0.72
|
|
|
|
$1.45
|
|
|
|
($0.09
|
)
|
|
|
$0.81
|
|
|
|
$1.54
|
|
Total Revenue - FTE
3
|
|
$2,201
|
|
|
|
$4,231
|
|
|
|
$105
|
|
|
|
$2,096
|
|
|
|
$4,126
|
|
Efficiency ratio
7
|
68.93
|
%
|
|
67.92
|
%
|
|
|
|
63.85
|
%
|
|
65.32
|
%
|
||||||
Tangible efficiency ratio
8
|
68.77
|
|
|
67.76
|
|
|
|
|
63.69
|
|
|
65.15
|
|
||||||
Effective tax rate
|
30.23
|
|
|
27.05
|
|
|
|
|
30.69
|
|
|
27.50
|
|
|
SELECTED QUARTERLY FINANCIAL DATA AND RECONCILEMENT OF
NON-U.S. GAAP MEASURES, continued |
|||||||
(Dollars in billions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Reconciliation of Common Equity Tier 1 Ratio:
|
|
|
|
||||
Tier 1 Common Equity - Basel I
|
|
$15.2
|
|
|
|
$14.6
|
|
Adjustments from Basel I to Basel III
16
|
—
|
|
|
—
|
|
||
CET 1 - Basel III
17
|
15.2
|
|
|
14.6
|
|
||
|
|
|
|
||||
RWA - Basel I
|
155.9
|
|
|
148.7
|
|
||
Adjustments from Basel I to Basel III
18
|
0.4
|
|
|
3.9
|
|
||
RWA - Basel III
17
|
156.3
|
|
|
152.6
|
|
||
Resulting regulatory capital ratios:
|
|
|
|
||||
Basel I - Tier 1 common equity ratio
|
9.7
|
%
|
|
9.8
|
%
|
||
Basel III -
CET 1 ratio
17
|
9.7
|
|
|
9.6
|
|
Consolidated Daily Average Balances, Income/Expense, and Average Yields Earned/Rates Paid
|
Table 2
|
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Increase/(Decrease)
|
|||||||||||||||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
|
||||||||||||||||||||||||
(Dollars in millions; yields on taxable-equivalent basis)
|
Average
Balances
|
|
Income/
Expense
|
|
Yields/
Rates
|
|
Average
Balances
|
|
Income/
Expense
|
|
Yields/
Rates
|
|
Average
Balances
|
|
Yields/
Rates
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans:
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
C&I - FTE
2
|
|
$60,141
|
|
|
|
$545
|
|
|
3.63
|
%
|
|
|
$54,490
|
|
|
|
$544
|
|
|
4.01
|
%
|
|
|
$5,651
|
|
|
(0.38
|
)
|
CRE
|
6,052
|
|
|
44
|
|
|
2.92
|
|
|
4,262
|
|
|
35
|
|
|
3.27
|
|
|
1,790
|
|
|
(0.35
|
)
|
|||||
Commercial construction
|
1,006
|
|
|
9
|
|
|
3.41
|
|
|
628
|
|
|
5
|
|
|
3.47
|
|
|
378
|
|
|
(0.06
|
)
|
|||||
Residential mortgages - guaranteed
|
2,994
|
|
|
27
|
|
|
3.62
|
|
|
3,768
|
|
|
27
|
|
|
2.86
|
|
|
(774
|
)
|
|
0.76
|
|
|||||
Residential mortgages - nonguaranteed
|
23,849
|
|
|
237
|
|
|
3.98
|
|
|
22,470
|
|
|
242
|
|
|
4.30
|
|
|
1,379
|
|
|
(0.32
|
)
|
|||||
Home equity products
|
14,394
|
|
|
128
|
|
|
3.58
|
|
|
14,358
|
|
|
131
|
|
|
3.65
|
|
|
36
|
|
|
(0.07
|
)
|
|||||
Residential construction
|
474
|
|
|
5
|
|
|
4.34
|
|
|
559
|
|
|
8
|
|
|
5.46
|
|
|
(85
|
)
|
|
(1.12
|
)
|
|||||
Guaranteed student loans
|
5,463
|
|
|
50
|
|
|
3.64
|
|
|
5,339
|
|
|
50
|
|
|
3.78
|
|
|
124
|
|
|
(0.14
|
)
|
|||||
Other direct
|
3,342
|
|
|
35
|
|
|
4.23
|
|
|
2,434
|
|
|
27
|
|
|
4.41
|
|
|
908
|
|
|
(0.18
|
)
|
|||||
Indirect
|
11,388
|
|
|
91
|
|
|
3.19
|
|
|
11,073
|
|
|
94
|
|
|
3.41
|
|
|
315
|
|
|
(0.22
|
)
|
|||||
Credit cards
|
732
|
|
|
18
|
|
|
9.63
|
|
|
617
|
|
|
15
|
|
|
9.80
|
|
|
115
|
|
|
(0.17
|
)
|
|||||
Nonaccrual
3
|
899
|
|
|
6
|
|
|
2.81
|
|
|
1,374
|
|
|
9
|
|
|
2.76
|
|
|
(475
|
)
|
|
0.05
|
|
|||||
Total loans
|
130,734
|
|
|
1,195
|
|
|
3.67
|
|
|
121,372
|
|
|
1,187
|
|
|
3.92
|
|
|
9,362
|
|
|
(0.25
|
)
|
|||||
Securities AFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Taxable
|
22,799
|
|
|
147
|
|
|
2.58
|
|
|
22,834
|
|
|
141
|
|
|
2.46
|
|
|
(35
|
)
|
|
0.12
|
|
|||||
Tax-exempt - FTE
2
|
263
|
|
|
3
|
|
|
5.26
|
|
|
263
|
|
|
3
|
|
|
5.18
|
|
|
—
|
|
|
0.08
|
|
|||||
Total securities AFS - FTE
|
23,062
|
|
|
150
|
|
|
2.61
|
|
|
23,097
|
|
|
144
|
|
|
2.49
|
|
|
(35
|
)
|
|
0.12
|
|
|||||
Fed funds sold and securities borrowed or purchased under agreements to resell
|
1,047
|
|
|
—
|
|
|
—
|
|
|
1,107
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|||||
LHFS
|
1,678
|
|
|
17
|
|
|
4.03
|
|
|
3,540
|
|
|
29
|
|
|
3.26
|
|
|
(1,862
|
)
|
|
0.77
|
|
|||||
Interest-bearing deposits
|
25
|
|
|
—
|
|
|
0.16
|
|
|
21
|
|
|
—
|
|
|
0.06
|
|
|
4
|
|
|
0.10
|
|
|||||
Interest earning trading assets
|
3,827
|
|
|
19
|
|
|
1.98
|
|
|
4,358
|
|
|
18
|
|
|
1.60
|
|
|
(531
|
)
|
|
0.38
|
|
|||||
Total earning assets
|
160,373
|
|
|
1,381
|
|
|
3.45
|
|
|
153,495
|
|
|
1,378
|
|
|
3.60
|
|
|
6,878
|
|
|
(0.15
|
)
|
|||||
ALLL
|
(2,023
|
)
|
|
|
|
|
|
(2,143
|
)
|
|
|
|
|
|
120
|
|
|
|
||||||||||
Cash and due from banks
|
5,412
|
|
|
|
|
|
|
4,453
|
|
|
|
|
|
|
959
|
|
|
|
||||||||||
Other assets
|
14,675
|
|
|
|
|
|
|
14,256
|
|
|
|
|
|
|
419
|
|
|
|
||||||||||
Noninterest earning trading assets and derivatives
|
1,155
|
|
|
|
|
|
|
1,789
|
|
|
|
|
|
|
(634
|
)
|
|
|
||||||||||
Unrealized gains on securities available for sale, net
|
228
|
|
|
|
|
|
|
687
|
|
|
|
|
|
|
(459
|
)
|
|
|
||||||||||
Total assets
|
|
$179,820
|
|
|
|
|
|
|
|
$172,537
|
|
|
|
|
|
|
|
$7,283
|
|
|
|
|||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NOW accounts
|
|
$29,198
|
|
|
|
$6
|
|
|
0.08
|
%
|
|
|
$26,015
|
|
|
|
$4
|
|
|
0.06
|
%
|
|
|
$3,183
|
|
|
0.02
|
|
Money market accounts
|
42,963
|
|
|
15
|
|
|
0.14
|
|
|
41,850
|
|
|
13
|
|
|
0.13
|
|
|
1,113
|
|
|
0.01
|
|
|||||
Savings
|
6,182
|
|
|
1
|
|
|
0.04
|
|
|
5,808
|
|
|
1
|
|
|
0.05
|
|
|
374
|
|
|
(0.01
|
)
|
|||||
Consumer time
|
7,701
|
|
|
17
|
|
|
0.89
|
|
|
9,163
|
|
|
26
|
|
|
1.15
|
|
|
(1,462
|
)
|
|
(0.26
|
)
|
|||||
Other time
|
4,398
|
|
|
12
|
|
|
1.07
|
|
|
5,036
|
|
|
17
|
|
|
1.34
|
|
|
(638
|
)
|
|
(0.27
|
)
|
|||||
Total interest-bearing consumer and commercial deposits
|
90,442
|
|
|
51
|
|
|
0.22
|
|
|
87,872
|
|
|
61
|
|
|
0.28
|
|
|
2,570
|
|
|
(0.06
|
)
|
|||||
Brokered time deposits
|
1,890
|
|
|
10
|
|
|
2.19
|
|
|
2,038
|
|
|
14
|
|
|
2.54
|
|
|
(148
|
)
|
|
(0.35
|
)
|
|||||
Foreign deposits
|
3
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
0.13
|
|
|
(34
|
)
|
|
(0.13
|
)
|
|||||
Total interest-bearing deposits
|
92,335
|
|
|
61
|
|
|
0.27
|
|
|
89,947
|
|
|
75
|
|
|
0.33
|
|
|
2,388
|
|
|
(0.06
|
)
|
|||||
Funds purchased
|
825
|
|
|
—
|
|
|
0.09
|
|
|
657
|
|
|
—
|
|
|
0.10
|
|
|
168
|
|
|
(0.01
|
)
|
|||||
Securities sold under agreements to repurchase
|
2,148
|
|
|
1
|
|
|
0.12
|
|
|
1,879
|
|
|
1
|
|
|
0.13
|
|
|
269
|
|
|
(0.01
|
)
|
|||||
Interest-bearing trading liabilities
|
783
|
|
|
6
|
|
|
2.83
|
|
|
751
|
|
|
4
|
|
|
2.29
|
|
|
32
|
|
|
0.54
|
|
|||||
Other short-term borrowings
|
5,796
|
|
|
3
|
|
|
0.23
|
|
|
5,422
|
|
|
3
|
|
|
0.24
|
|
|
374
|
|
|
(0.01
|
)
|
|||||
Long-term debt
|
12,014
|
|
|
66
|
|
|
2.21
|
|
|
9,700
|
|
|
53
|
|
|
2.19
|
|
|
2,314
|
|
|
0.02
|
|
|||||
Total interest-bearing liabilities
|
113,901
|
|
|
137
|
|
|
0.48
|
|
|
108,356
|
|
|
136
|
|
|
0.50
|
|
|
5,545
|
|
|
(0.02
|
)
|
|||||
Noninterest-bearing deposits
|
40,030
|
|
|
|
|
|
|
38,707
|
|
|
|
|
|
|
1,323
|
|
|
|
||||||||||
Other liabilities
|
3,599
|
|
|
|
|
|
|
3,637
|
|
|
|
|
|
|
(38
|
)
|
|
|
||||||||||
Noninterest-bearing trading liabilities and derivatives
|
296
|
|
|
|
|
|
|
565
|
|
|
|
|
|
|
(269
|
)
|
|
|
||||||||||
Shareholders’ equity
|
21,994
|
|
|
|
|
|
|
21,272
|
|
|
|
|
|
|
722
|
|
|
|
||||||||||
Total liabilities and shareholders’ equity
|
|
$179,820
|
|
|
|
|
|
|
|
$172,537
|
|
|
|
|
|
|
|
$7,283
|
|
|
|
|||||||
Interest Rate Spread
|
|
|
|
|
2.97
|
%
|
|
|
|
|
|
3.10
|
%
|
|
|
|
(0.13
|
)
|
||||||||||
Net interest income - FTE
4
|
|
|
|
$1,244
|
|
|
|
|
|
|
|
$1,242
|
|
|
|
|
|
|
|
|||||||||
Net Interest Margin
5
|
|
|
|
|
3.11
|
%
|
|
|
|
|
|
3.25
|
%
|
|
|
|
(0.14
|
)
|
|
|
|
|
Table 3
|
|
|||
|
|
|
|
|
||||
|
|
Ending Notional
Balance of Active Swaps
(in billions)
|
|
Estimated Net
1
Interest Income
Related to Swaps
(in millions)
|
||||
Third Quarter 2014
|
|
|
$18.9
|
|
|
|
$98
|
|
Fourth Quarter 2014
|
|
15.4
|
|
|
84
|
|
||
First Quarter 2015
|
|
11.9
|
|
|
46
|
|
||
Second Quarter 2015
|
|
9.9
|
|
|
36
|
|
||
Third Quarter 2015
|
|
9.5
|
|
|
34
|
|
||
Fourth Quarter 2015
|
|
9.5
|
|
|
33
|
|
NONINTEREST INCOME
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Table 4
|
|
|||||||||
|
Three Months Ended June 30
|
|
|
|
Six Months Ended June 30
|
|
|
||||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
% Change
1
|
|
2014
|
|
2013
|
|
% Change
1
|
||||||||||
Service charges on deposit accounts
|
|
$160
|
|
|
|
$164
|
|
|
(2
|
)%
|
|
|
$314
|
|
|
|
$324
|
|
|
(3
|
)%
|
Other charges and fees
|
91
|
|
|
97
|
|
|
(6
|
)
|
|
179
|
|
|
186
|
|
|
(4
|
)
|
||||
Card fees
|
82
|
|
|
78
|
|
|
5
|
|
|
158
|
|
|
154
|
|
|
3
|
|
||||
Trust and investment management income
|
116
|
|
|
130
|
|
|
(11
|
)
|
|
247
|
|
|
254
|
|
|
(3
|
)
|
||||
Retail investment services
|
76
|
|
|
69
|
|
|
10
|
|
|
147
|
|
|
130
|
|
|
13
|
|
||||
Investment banking income
|
119
|
|
|
93
|
|
|
28
|
|
|
207
|
|
|
161
|
|
|
29
|
|
||||
Trading income
|
47
|
|
|
49
|
|
|
(4
|
)
|
|
96
|
|
|
91
|
|
|
5
|
|
||||
Mortgage servicing related income
|
45
|
|
|
1
|
|
|
NM
|
|
|
99
|
|
|
39
|
|
|
NM
|
|
||||
Mortgage production related income
|
52
|
|
|
133
|
|
|
(61
|
)
|
|
95
|
|
|
292
|
|
|
(67
|
)
|
||||
Gain on sale of subsidiary
2
|
105
|
|
|
—
|
|
|
NM
|
|
|
105
|
|
|
—
|
|
|
NM
|
|
||||
Net securities (losses)/gains
|
(1
|
)
|
|
—
|
|
|
NM
|
|
|
(2
|
)
|
|
2
|
|
|
NM
|
|
||||
Other noninterest income
|
65
|
|
|
44
|
|
|
48
|
|
|
103
|
|
|
88
|
|
|
17
|
|
||||
Total noninterest income
|
|
$957
|
|
|
|
$858
|
|
|
12
|
%
|
|
|
$1,748
|
|
|
|
$1,721
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total noninterest income,
excluding gain on sale of RidgeWorth
2
|
|
$852
|
|
|
|
$858
|
|
|
(1
|
)%
|
|
|
$1,643
|
|
|
|
$1,721
|
|
|
(5
|
)%
|
NONINTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Table 5
|
|
|||||||||
|
Three Months Ended June 30
|
|
|
|
Six Months Ended June 30
|
|
|
||||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
% Change
1
|
|
2014
|
|
2013
|
|
% Change
1
|
||||||||||
Employee compensation
|
|
$659
|
|
|
|
$635
|
|
|
4
|
%
|
|
|
$1,319
|
|
|
|
$1,246
|
|
|
6
|
%
|
Employee benefits
|
104
|
|
|
102
|
|
|
2
|
|
|
244
|
|
|
250
|
|
|
(2
|
)
|
||||
Personnel expenses
|
763
|
|
|
737
|
|
|
4
|
|
|
1,563
|
|
|
1,496
|
|
|
4
|
|
||||
Outside processing and software
|
181
|
|
|
187
|
|
|
(3
|
)
|
|
351
|
|
|
365
|
|
|
(4
|
)
|
||||
Operating losses
|
218
|
|
|
72
|
|
|
NM
|
|
|
239
|
|
|
111
|
|
|
NM
|
|
||||
Net occupancy expense
|
83
|
|
|
86
|
|
|
(3
|
)
|
|
169
|
|
|
175
|
|
|
(3
|
)
|
||||
Equipment expense
|
42
|
|
|
46
|
|
|
(9
|
)
|
|
86
|
|
|
91
|
|
|
(5
|
)
|
||||
Regulatory assessments
|
40
|
|
|
41
|
|
|
(2
|
)
|
|
80
|
|
|
95
|
|
|
(16
|
)
|
||||
Marketing and customer development
|
30
|
|
|
31
|
|
|
(3
|
)
|
|
56
|
|
|
61
|
|
|
(8
|
)
|
||||
Credit and collection services
|
23
|
|
|
52
|
|
|
(56
|
)
|
|
46
|
|
|
85
|
|
|
(46
|
)
|
||||
Amortization of intangible assets
|
4
|
|
|
6
|
|
|
(33
|
)
|
|
7
|
|
|
12
|
|
|
(42
|
)
|
||||
Other noninterest expense
|
133
|
|
|
129
|
|
|
3
|
|
|
277
|
|
|
249
|
|
|
11
|
|
||||
Total noninterest expense
|
|
$1,517
|
|
|
|
$1,387
|
|
|
9
|
%
|
|
|
$2,874
|
|
|
|
$2,740
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total noninterest expense,
excluding Form 8-K and other
legacy mortgage-related items
2
|
|
$1,338
|
|
|
|
$1,387
|
|
|
(4
|
)%
|
|
|
$2,695
|
|
|
|
$2,740
|
|
|
(2
|
)%
|
Loan Portfolio by Types of Loans
|
|
|
|
|
Table 6
|
|
||||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
|
% Change
3
|
|||||
Commercial loans:
|
|
|
|
|
|
|||||
C&I
|
|
$61,337
|
|
|
|
$57,974
|
|
|
6
|
%
|
CRE
|
6,105
|
|
|
5,481
|
|
|
11
|
|
||
Commercial construction
|
1,096
|
|
|
855
|
|
|
28
|
|
||
Total commercial loans
|
68,538
|
|
|
64,310
|
|
|
7
|
|
||
Residential loans:
|
|
|
|
|
|
|||||
Residential mortgages - guaranteed
|
661
|
|
|
3,416
|
|
|
(81
|
)
|
||
Residential mortgages - nonguaranteed
1
|
24,173
|
|
|
24,412
|
|
|
(1
|
)
|
||
Home equity products
|
14,519
|
|
|
14,809
|
|
|
(2
|
)
|
||
Residential construction
|
508
|
|
|
553
|
|
|
(8
|
)
|
||
Total residential loans
|
39,861
|
|
|
43,190
|
|
|
(8
|
)
|
||
Consumer loans:
|
|
|
|
|
|
|||||
Guaranteed student loans
|
5,420
|
|
|
5,545
|
|
|
(2
|
)
|
||
Other direct
|
3,675
|
|
|
2,829
|
|
|
30
|
|
||
Indirect
|
11,501
|
|
|
11,272
|
|
|
2
|
|
||
Credit cards
|
749
|
|
|
731
|
|
|
2
|
|
||
Total consumer loans
|
21,345
|
|
|
20,377
|
|
|
5
|
|
||
LHFI
|
|
$129,744
|
|
|
|
$127,877
|
|
|
1
|
%
|
LHFS
2
|
|
$4,046
|
|
|
|
$1,699
|
|
|
NM
|
|
|
|
|
|
|
Loan Types by Geography
|
|
|
|
|
|
|
|
|
|
Table 7
|
|
|||||||||
|
June 30, 2014
|
|||||||||||||||||||
|
Commercial
|
|
Residential
|
|
Consumer
|
|||||||||||||||
(Dollars in millions)
|
Loans
|
|
% of total
|
|
Loans
|
|
% of total
|
|
Loans
|
|
% of total
|
|||||||||
Geography:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Florida
|
|
$11,757
|
|
|
17
|
%
|
|
|
$10,329
|
|
|
26
|
%
|
|
|
$3,769
|
|
|
18
|
%
|
Georgia
|
8,231
|
|
|
12
|
|
|
6,016
|
|
|
15
|
|
|
1,604
|
|
|
7
|
|
|||
Virginia
|
7,060
|
|
|
10
|
|
|
5,755
|
|
|
14
|
|
|
1,623
|
|
|
8
|
|
|||
Tennessee
|
4,485
|
|
|
7
|
|
|
2,302
|
|
|
6
|
|
|
765
|
|
|
4
|
|
|||
North Carolina
|
3,712
|
|
|
5
|
|
|
3,675
|
|
|
9
|
|
|
1,448
|
|
|
7
|
|
|||
Maryland
|
3,631
|
|
|
5
|
|
|
3,905
|
|
|
10
|
|
|
1,396
|
|
|
6
|
|
|||
South Carolina
|
1,213
|
|
|
2
|
|
|
1,887
|
|
|
5
|
|
|
432
|
|
|
2
|
|
|||
District of Columbia
|
1,291
|
|
|
2
|
|
|
703
|
|
|
2
|
|
|
96
|
|
|
—
|
|
|||
Total banking region
|
41,380
|
|
|
60
|
|
|
34,572
|
|
|
87
|
|
|
11,133
|
|
|
52
|
|
|||
California, Illinois, Pennsylvania,
Texas, New Jersey, New York
|
13,268
|
|
|
20
|
|
|
3,146
|
|
|
8
|
|
|
5,513
|
|
|
26
|
|
|||
All other states
|
13,890
|
|
|
20
|
|
|
2,143
|
|
|
5
|
|
|
4,699
|
|
|
22
|
|
|||
Total outside banking region
|
27,158
|
|
|
40
|
|
|
5,289
|
|
|
13
|
|
|
10,212
|
|
|
48
|
|
|||
Total
|
|
$68,538
|
|
|
100
|
%
|
|
|
$39,861
|
|
|
100
|
%
|
|
|
$21,345
|
|
|
100
|
%
|
|
December 31, 2013
|
|||||||||||||||||||
|
Commercial
|
|
Residential
|
|
Consumer
|
|||||||||||||||
(Dollars in millions)
|
Loans
|
|
% of total
|
|
Loans
|
|
% of total
|
|
Loans
|
|
% of total
|
|||||||||
Geography:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Florida
|
|
$12,003
|
|
|
19
|
%
|
|
|
$10,770
|
|
|
25
|
%
|
|
|
$3,683
|
|
|
18
|
%
|
Georgia
|
8,175
|
|
|
13
|
|
|
6,210
|
|
|
14
|
|
|
1,539
|
|
|
8
|
|
|||
Virginia
|
7,052
|
|
|
11
|
|
|
6,312
|
|
|
15
|
|
|
1,633
|
|
|
8
|
|
|||
Tennessee
|
4,689
|
|
|
7
|
|
|
2,489
|
|
|
6
|
|
|
738
|
|
|
4
|
|
|||
North Carolina
|
3,583
|
|
|
5
|
|
|
3,902
|
|
|
9
|
|
|
1,464
|
|
|
7
|
|
|||
Maryland
|
3,431
|
|
|
5
|
|
|
4,097
|
|
|
9
|
|
|
1,402
|
|
|
7
|
|
|||
South Carolina
|
1,122
|
|
|
2
|
|
|
2,023
|
|
|
5
|
|
|
412
|
|
|
2
|
|
|||
District of Columbia
|
1,066
|
|
|
2
|
|
|
727
|
|
|
2
|
|
|
95
|
|
|
—
|
|
|||
Total banking region
|
41,121
|
|
|
64
|
|
|
36,530
|
|
|
85
|
|
|
10,966
|
|
|
54
|
|
|||
California, Illinois, Pennsylvania,
Texas, New Jersey, New York
|
12,131
|
|
|
19
|
|
|
3,811
|
|
|
9
|
|
|
5,043
|
|
|
25
|
|
|||
All other states
|
11,058
|
|
|
17
|
|
|
2,849
|
|
|
6
|
|
|
4,368
|
|
|
21
|
|
|||
Total outside banking region
|
23,189
|
|
|
36
|
|
|
6,660
|
|
|
15
|
|
|
9,411
|
|
|
46
|
|
|||
Total
|
|
$64,310
|
|
|
100
|
%
|
|
|
$43,190
|
|
|
100
|
%
|
|
|
$20,377
|
|
|
100
|
%
|
Summary of Credit Losses Experience
|
|
|
|
|
|
|
|
Table 8
|
|
||||||||||||
|
Three Months Ended June 30
|
|
|
|
Six Months Ended June 30
|
|
|
||||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
5
|
||||||||||
Allowance for Credit Losses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance - beginning of period
|
|
$2,086
|
|
|
|
$2,205
|
|
|
(5
|
)%
|
|
|
$2,094
|
|
|
|
$2,219
|
|
|
(6
|
)%
|
(Benefit)/provision for unfunded commitments
|
(3
|
)
|
|
(6
|
)
|
|
50
|
|
|
(7
|
)
|
|
2
|
|
|
NM
|
|
||||
Provision for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loans
|
18
|
|
|
42
|
|
|
(57
|
)
|
|
57
|
|
|
106
|
|
|
(46
|
)
|
||||
Residential loans
|
32
|
|
|
78
|
|
|
(59
|
)
|
|
80
|
|
|
190
|
|
|
(58
|
)
|
||||
Consumer loans
|
26
|
|
|
32
|
|
|
(19
|
)
|
|
45
|
|
|
60
|
|
|
(25
|
)
|
||||
Total provision for loan losses
|
76
|
|
|
152
|
|
|
(50
|
)
|
|
182
|
|
|
356
|
|
|
(49
|
)
|
||||
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loans
|
(38
|
)
|
|
(64
|
)
|
|
(41
|
)
|
|
(71
|
)
|
|
(124
|
)
|
|
(43
|
)
|
||||
Residential loans
|
(90
|
)
|
|
(143
|
)
|
|
(37
|
)
|
|
(175
|
)
|
|
(321
|
)
|
|
(45
|
)
|
||||
Consumer loans
|
(30
|
)
|
|
(26
|
)
|
|
15
|
|
|
(63
|
)
|
|
(61
|
)
|
|
3
|
|
||||
Total charge-offs
|
(158
|
)
|
|
(233
|
)
|
|
(32
|
)
|
|
(309
|
)
|
|
(506
|
)
|
|
(39
|
)
|
||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loans
|
12
|
|
|
20
|
|
|
(40
|
)
|
|
26
|
|
|
35
|
|
|
(26
|
)
|
||||
Residential loans
|
23
|
|
|
24
|
|
|
(4
|
)
|
|
40
|
|
|
46
|
|
|
(13
|
)
|
||||
Consumer loans
|
10
|
|
|
10
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
—
|
|
||||
Total recoveries
|
45
|
|
|
54
|
|
|
(17
|
)
|
|
86
|
|
|
101
|
|
|
(15
|
)
|
||||
Net charge-offs
|
(113
|
)
|
|
(179
|
)
|
|
(37
|
)
|
|
(223
|
)
|
|
(405
|
)
|
|
(45
|
)
|
||||
Balance - end of period
|
|
$2,046
|
|
|
|
$2,172
|
|
|
(6
|
)%
|
|
|
$2,046
|
|
|
|
$2,172
|
|
|
(6
|
)%
|
Components:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ALLL
|
|
|
|
|
|
|
|
|
$2,003
|
|
|
|
$2,125
|
|
|
(6
|
)%
|
||||
Unfunded commitments reserve
1
|
|
|
|
|
|
|
|
43
|
|
|
47
|
|
|
(9
|
)
|
||||||
Allowance for credit losses
|
|
|
|
|
|
|
|
|
|
|
$2,046
|
|
|
|
$2,172
|
|
|
(6
|
)%
|
||
Average loans
|
|
$130,734
|
|
|
|
$121,372
|
|
|
8
|
%
|
|
|
$129,635
|
|
|
|
$121,128
|
|
|
7
|
%
|
Period-end loans outstanding
|
|
|
|
|
|
|
129,744
|
|
|
122,031
|
|
|
6
|
|
|||||||
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ALLL to period-end loans
2,3
|
|
|
|
|
|
|
|
1.55
|
%
|
|
1.75
|
%
|
|
(11
|
)%
|
||||||
ALLL to NPLs
4
|
|
|
|
|
|
|
|
225
|
|
|
188
|
|
|
20
|
|
||||||
ALLL to net charge-offs (annualized)
|
|
|
|
|
|
|
|
4.41x
|
|
|
2.97x
|
|
|
48
|
|
||||||
Net charge-offs to average loans (annualized)
|
0.35
|
%
|
|
0.59
|
%
|
|
(41
|
)%
|
|
0.35
|
%
|
|
0.67
|
%
|
|
(48
|
)%
|
Allowance for Loan Losses by Loan Segment
|
|
|
Table 9
|
|
|||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
ALLL
|
|
|
|
||||
Commercial loans
|
|
$958
|
|
|
|
$946
|
|
Residential loans
|
875
|
|
|
930
|
|
||
Consumer loans
|
170
|
|
|
168
|
|
||
Total
|
|
$2,003
|
|
|
|
$2,044
|
|
Segment ALLL as a % of total ALLL
|
|
|
|
||||
Commercial loans
|
48
|
%
|
|
46
|
%
|
||
Residential loans
|
44
|
|
|
46
|
|
||
Consumer loans
|
8
|
|
|
8
|
|
||
Total
|
100
|
%
|
|
100
|
%
|
||
Loan segment as a % of total loans
|
|
|
|
||||
Commercial loans
|
53
|
%
|
|
50
|
%
|
||
Residential loans
|
31
|
|
|
34
|
|
||
Consumer loans
|
16
|
|
|
16
|
|
||
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
Table 10
|
|
||||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
|
% Change
3
|
|||||
Nonaccrual/NPLs
|
|
|
|
|
|
|||||
Commercial loans:
|
|
|
|
|
|
|||||
C&I
|
|
$199
|
|
|
|
$196
|
|
|
2
|
%
|
CRE
|
38
|
|
|
39
|
|
|
(3
|
)
|
||
Commercial construction
|
10
|
|
|
12
|
|
|
(17
|
)
|
||
Total commercial NPLs
|
247
|
|
|
247
|
|
|
—
|
|
||
Residential loans:
|
|
|
|
|
|
|||||
Residential mortgages - nonguaranteed
|
405
|
|
|
441
|
|
|
(8
|
)
|
||
Home equity products
|
191
|
|
|
210
|
|
|
(9
|
)
|
||
Residential construction
|
46
|
|
|
61
|
|
|
(25
|
)
|
||
Total residential NPLs
|
642
|
|
|
712
|
|
|
(10
|
)
|
||
Consumer loans:
|
|
|
|
|
|
|||||
Other direct
|
4
|
|
|
5
|
|
|
(20
|
)
|
||
Indirect
|
6
|
|
|
7
|
|
|
(14
|
)
|
||
Total consumer NPLs
|
10
|
|
|
12
|
|
|
(17
|
)
|
||
Total nonaccrual/NPLs
|
899
|
|
|
971
|
|
|
(7
|
)
|
||
OREO
1
|
136
|
|
|
170
|
|
|
(20
|
)
|
||
Other repossessed assets
|
6
|
|
|
7
|
|
|
(14
|
)
|
||
Nonperforming LHFS
|
—
|
|
|
17
|
|
|
(100
|
)
|
||
Total NPAs
|
|
$1,041
|
|
|
|
$1,165
|
|
|
(11
|
)%
|
Accruing loans past due 90 days or more
|
|
$1,045
|
|
|
|
$1,228
|
|
|
(15
|
)%
|
Accruing LHFS past due 90 days or more
|
1
|
|
|
—
|
|
|
NM
|
|
||
TDRs
|
|
|
|
|
|
|||||
Accruing restructured loans
|
|
$2,617
|
|
|
|
$2,749
|
|
|
(5
|
)%
|
Nonaccruing restructured loans
2
|
365
|
|
|
391
|
|
|
(7
|
)
|
||
Ratios
|
|
|
|
|
|
|||||
NPLs to total loans
|
0.69
|
%
|
|
0.76
|
%
|
|
(9
|
)%
|
||
Nonperforming assets to total loans plus OREO,
other repossessed assets, and nonperforming LHFS |
0.80
|
|
|
0.91
|
|
|
(12
|
)
|
Selected Residential TDR Data
|
|
|
|
|
|
|
|
|
|
|
Table 11
|
|
|||||||||||
|
June 30, 2014
|
||||||||||||||||||||||
|
Accruing TDRs
|
|
Nonaccruing TDRs
|
||||||||||||||||||||
(Dollars in millions)
|
Current
|
|
Delinquent
1
|
|
Total
|
|
Current
|
|
Delinquent
1
|
|
Total
|
||||||||||||
Rate reduction
|
|
$761
|
|
|
|
$74
|
|
|
|
$835
|
|
|
|
$19
|
|
|
|
$58
|
|
|
|
$77
|
|
Term extension
|
15
|
|
|
4
|
|
|
19
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Rate reduction and term extension
|
1,277
|
|
|
113
|
|
|
1,390
|
|
|
37
|
|
|
109
|
|
|
146
|
|
||||||
Other
2
|
181
|
|
|
11
|
|
|
192
|
|
|
17
|
|
|
43
|
|
|
60
|
|
||||||
Total
|
|
$2,234
|
|
|
|
$202
|
|
|
|
$2,436
|
|
|
|
$73
|
|
|
|
$214
|
|
|
|
$287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 31, 2013
|
||||||||||||||||||||||
|
Accruing TDRs
|
|
Nonaccruing TDRs
|
||||||||||||||||||||
(Dollars in millions)
|
Current
|
|
Delinquent
1
|
|
Total
|
|
Current
|
|
Delinquent
1
|
|
Total
|
||||||||||||
Rate reduction
|
|
$692
|
|
|
|
$90
|
|
|
|
$782
|
|
|
|
$27
|
|
|
|
$50
|
|
|
|
$77
|
|
Term extension
|
17
|
|
|
4
|
|
|
21
|
|
|
1
|
|
|
6
|
|
|
7
|
|
||||||
Rate reduction and term extension
|
1,439
|
|
|
135
|
|
|
1,574
|
|
|
27
|
|
|
127
|
|
|
154
|
|
||||||
Other
2
|
180
|
|
|
13
|
|
|
193
|
|
|
16
|
|
|
54
|
|
|
70
|
|
||||||
Total
|
|
$2,328
|
|
|
|
$242
|
|
|
|
$2,570
|
|
|
|
$71
|
|
|
|
$237
|
|
|
|
$308
|
|
Trading Assets and Liabilities and Derivatives
|
|
|
Table 12
|
|
|||
|
|
||||||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Trading Assets and Derivatives:
|
|
|
|
||||
U.S. Treasury securities
|
|
$170
|
|
|
|
$219
|
|
Federal agency securities
|
405
|
|
|
426
|
|
||
U.S. states and political subdivisions
|
32
|
|
|
65
|
|
||
MBS - agency
|
481
|
|
|
323
|
|
||
CDO/CLO securities
|
5
|
|
|
57
|
|
||
ABS
|
—
|
|
|
6
|
|
||
Corporate and other debt securities
|
727
|
|
|
534
|
|
||
CP
|
141
|
|
|
29
|
|
||
Equity securities
|
58
|
|
|
109
|
|
||
Derivatives
1
|
1,333
|
|
|
1,384
|
|
||
Trading loans
2
|
1,789
|
|
|
1,888
|
|
||
Total trading assets and derivatives
|
|
$5,141
|
|
|
|
$5,040
|
|
Trading Liabilities and Derivatives:
|
|
|
|
||||
U.S. Treasury securities
|
|
$516
|
|
|
|
$472
|
|
Corporate and other debt securities
|
310
|
|
|
179
|
|
||
Equity securities
|
—
|
|
|
5
|
|
||
Derivatives
1
|
364
|
|
|
525
|
|
||
Total trading liabilities and derivatives
|
|
$1,190
|
|
|
|
$1,181
|
|
Securities Available for Sale
|
|
|
|
|
|
|
Table 13
|
|
|||||||
|
June 30, 2014
|
||||||||||||||
(Dollars in millions)
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Treasury securities
|
|
$1,581
|
|
|
|
$10
|
|
|
|
$17
|
|
|
|
$1,574
|
|
Federal agency securities
|
1,005
|
|
|
17
|
|
|
32
|
|
|
990
|
|
||||
U.S. states and political subdivisions
|
243
|
|
|
8
|
|
|
—
|
|
|
251
|
|
||||
MBS - agency
|
19,692
|
|
|
555
|
|
|
182
|
|
|
20,065
|
|
||||
MBS - private
|
136
|
|
|
4
|
|
|
—
|
|
|
140
|
|
||||
ABS
|
20
|
|
|
2
|
|
|
—
|
|
|
22
|
|
||||
Corporate and other debt securities
|
38
|
|
|
3
|
|
|
—
|
|
|
41
|
|
||||
Other equity securities
1
|
931
|
|
|
1
|
|
|
—
|
|
|
932
|
|
||||
Total securities AFS
|
|
$23,646
|
|
|
|
$600
|
|
|
|
$231
|
|
|
|
$24,015
|
|
|
December 31, 2013
|
||||||||||||||
(Dollars in millions)
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Treasury securities
|
|
$1,334
|
|
|
|
$6
|
|
|
|
$47
|
|
|
|
$1,293
|
|
Federal agency securities
|
1,028
|
|
|
13
|
|
|
57
|
|
|
984
|
|
||||
U.S. states and political subdivisions
|
232
|
|
|
7
|
|
|
2
|
|
|
237
|
|
||||
MBS - agency
|
18,915
|
|
|
421
|
|
|
425
|
|
|
18,911
|
|
||||
MBS - private
|
155
|
|
|
1
|
|
|
2
|
|
|
154
|
|
||||
ABS
|
78
|
|
|
2
|
|
|
1
|
|
|
79
|
|
||||
Corporate and other debt securities
|
39
|
|
|
3
|
|
|
—
|
|
|
42
|
|
||||
Other equity securities
1
|
841
|
|
|
1
|
|
|
—
|
|
|
842
|
|
||||
Total securities AFS
|
|
$22,622
|
|
|
|
$454
|
|
|
|
$534
|
|
|
|
$22,542
|
|
|
|
|
|
|
|
|
BORROWINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Short-Term Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 14
|
|
|||||||||||||
|
June 30, 2014
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
|||||||||||||||||||||||
|
Balance
|
|
Rate
|
|
Daily Average
|
|
Maximum
Outstanding at
any Month-End
|
|
Daily Average
|
|
Maximum
Outstanding at
any Month-End
|
|||||||||||||||||
(Dollars in millions)
|
|
Balance
|
|
Rate
|
|
|
Balance
|
|
Rate
|
|
||||||||||||||||||
Funds purchased
1
|
|
$1,053
|
|
|
0.09
|
%
|
|
|
$825
|
|
|
0.09
|
%
|
|
|
$1,078
|
|
|
|
$907
|
|
|
0.09
|
%
|
|
|
$1,375
|
|
Securities sold under agreements to repurchase
1
|
2,192
|
|
|
0.14
|
|
|
2,148
|
|
|
0.12
|
|
|
2,192
|
|
|
2,175
|
|
|
0.11
|
|
|
2,228
|
|
|||||
Other short-term borrowings
|
5,870
|
|
|
0.24
|
|
|
5,796
|
|
|
0.23
|
|
|
6,395
|
|
|
5,692
|
|
|
0.24
|
|
|
6,395
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
June 30, 2013
|
|
Three Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2013
|
|||||||||||||||||||||||
|
Balance
|
|
Rate
|
|
Daily Average
|
|
Maximum
Outstanding at
any Month-End
|
|
Daily Average
|
|
Maximum
Outstanding at
any Month-End
|
|||||||||||||||||
(Dollars in millions)
|
|
Balance
|
|
Rate
|
|
|
Balance
|
|
Rate
|
|
||||||||||||||||||
Funds purchased
1
|
|
$420
|
|
|
0.07
|
%
|
|
|
$657
|
|
|
0.10
|
%
|
|
|
$1,000
|
|
|
|
$686
|
|
|
0.10
|
%
|
|
|
$1,000
|
|
Securities sold under agreements to repurchase
1
|
1,869
|
|
|
0.18
|
|
|
1,879
|
|
|
0.13
|
|
|
1,869
|
|
|
1,793
|
|
|
0.16
|
|
|
1,869
|
|
|||||
Other short-term borrowings
|
5,825
|
|
|
0.25
|
|
|
5,422
|
|
|
0.24
|
|
|
5,825
|
|
|
4,576
|
|
|
0.26
|
|
|
5,825
|
|
|
Regulatory Capital Ratios
|
|
|
Table 15
|
|
|||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Tier 1 capital
|
|
$16,614
|
|
|
|
$16,073
|
|
Total capital
|
19,537
|
|
|
19,052
|
|
||
RWA
|
155,875
|
|
|
148,746
|
|
||
Average total assets for leverage ratio
|
173,815
|
|
|
167,848
|
|
||
Tier 1 common equity:
|
|
|
|
||||
Tier 1 capital
|
|
$16,614
|
|
|
|
$16,073
|
|
Less:
|
|
|
|
||||
Qualifying trust preferred securities
|
627
|
|
|
627
|
|
||
Preferred stock
|
725
|
|
|
725
|
|
||
Allowable minority interest
|
107
|
|
|
119
|
|
||
Tier 1 common equity
|
|
$15,155
|
|
|
|
$14,602
|
|
Risk-based ratios:
|
|
|
|
||||
Tier 1 common equity
1
|
9.72
|
%
|
|
9.82
|
%
|
||
Tier 1 capital
|
10.66
|
|
|
10.81
|
|
||
Total capital
|
12.53
|
|
|
12.81
|
|
||
Tier 1 leverage ratio
|
9.56
|
|
|
9.58
|
|
||
Total shareholders’ equity to assets
|
12.12
|
|
|
12.22
|
|
Net Interest Income Asset Sensitivity
|
|
|
Table 16
|
|
|
|
|
|
Estimated % Change in
Net Interest Income Over 12 Months
1
|
||
(Basis points)
|
June 30, 2014
|
|
December 31, 2013
|
Rate Change
|
|
|
|
+200
|
6.2%
|
|
1.8%
|
+100
|
3.2%
|
|
1.0%
|
-25
|
(0.6)%
|
|
(0.8)%
|
Market Value of Equity Sensitivity
|
|
|
Table 17
|
|
|
|
|
|
Estimated % Change in MVE
|
||
(Basis points)
|
June 30, 2014
|
|
December 31, 2013
|
Rate Change
|
|
|
|
+200
|
(5.1)%
|
|
(8.0)%
|
+100
|
(2.1)%
|
|
(3.8)%
|
-25
|
0.2%
|
|
0.8%
|
Value at Risk Profile
|
|
|
|
|
|
|
Table 18
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
VAR (1-day holding period)
|
|
|
|
|
|
|
|
||||||||
Ending
|
|
$2
|
|
|
|
$5
|
|
|
|
$2
|
|
|
|
$5
|
|
High
|
3
|
|
|
8
|
|
|
3
|
|
|
8
|
|
||||
Low
|
2
|
|
|
3
|
|
|
2
|
|
|
3
|
|
||||
Average
|
2
|
|
|
4
|
|
|
2
|
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Stressed VAR (10-day holding period)
|
|
|
|
|
|
|
|
||||||||
Ending
|
|
$37
|
|
|
|
$31
|
|
|
|
$37
|
|
|
|
$31
|
|
High
|
75
|
|
|
92
|
|
|
75
|
|
|
92
|
|
||||
Low
|
22
|
|
|
25
|
|
|
18
|
|
|
12
|
|
||||
Average
|
36
|
|
|
35
|
|
|
29
|
|
|
29
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||
VAR by Risk Factor (1-day holding period)
|
|
|
|
|
|
||||||||||
Commodity price risk
|
|
|
|
|
$—
|
|
|
|
$—
|
|
|||||
Equity price risk
|
|
|
|
1
|
|
|
2
|
|
|||||||
Foreign exchange risk
|
|
|
|
—
|
|
|
—
|
|
|||||||
Interest rate risk
|
|
|
|
1
|
|
|
2
|
|
|||||||
Credit spread risk
|
|
|
|
2
|
|
|
2
|
|
|||||||
VAR (1-day diversified) total
|
|
|
|
2
|
|
|
3
|
|
Debt Credit Ratings and Outlook
|
|
|
|
|
Table 19
|
|
June 30, 2014
|
||||
|
Moody’s
|
|
S&P
|
|
Fitch
|
SunTrust Banks, Inc.
|
|
|
|
|
|
Short-term
|
P-2
|
|
A-2
|
|
F2
|
Senior long-term
|
Baa1
|
|
BBB
|
|
BBB+
|
SunTrust Bank
|
|
|
|
|
|
Short-term
|
P-2
|
|
A-2
|
|
F2
|
Senior long-term
|
A3
|
|
BBB+
|
|
BBB+
|
Outlook
|
Stable
|
|
Positive
|
|
Positive
|
Unfunded Lending Commitments
|
|
|
Table 21
|
|
|||
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Unused lines of credit:
|
|
|
|
||||
Commercial
|
|
$47,001
|
|
|
|
$43,444
|
|
Mortgage commitments
1
|
3,401
|
|
|
2,722
|
|
||
Home equity lines
|
10,926
|
|
|
11,157
|
|
||
CRE
|
2,713
|
|
|
2,078
|
|
||
Credit card
|
5,718
|
|
|
4,708
|
|
||
Total unused lines of credit
|
|
$69,759
|
|
|
|
$64,109
|
|
Letters of credit:
|
|
|
|
||||
Financial standby
|
|
$3,179
|
|
|
|
$3,256
|
|
Performance standby
|
61
|
|
|
57
|
|
||
Commercial
|
26
|
|
|
28
|
|
||
Total letters of credit
|
|
$3,266
|
|
|
|
$3,341
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss) by Segment
|
|
|
|
|
|
|
Table 22
|
|
|||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Consumer Banking and Private Wealth Management
|
|
$162
|
|
|
|
$152
|
|
|
|
$315
|
|
|
|
$285
|
|
Wholesale Banking
|
245
|
|
|
228
|
|
|
423
|
|
|
409
|
|
||||
Mortgage Banking
|
(84
|
)
|
|
(69
|
)
|
|
(70
|
)
|
|
(73
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Corporate Other
|
119
|
|
|
96
|
|
|
201
|
|
|
164
|
|
||||
Reconciling Items
1
|
(43
|
)
|
|
(30
|
)
|
|
(65
|
)
|
|
(56
|
)
|
||||
Total Corporate Other
|
76
|
|
|
66
|
|
|
136
|
|
|
108
|
|
||||
Consolidated net income
|
|
$399
|
|
|
|
$377
|
|
|
|
$804
|
|
|
|
$729
|
|
Average Loans and Deposits by Segment
|
|
|
|
|
|
|
Table 23
|
|
|||||||
|
Three Months Ended June 30
|
||||||||||||||
|
Average Loans
|
|
Average Consumer
and Commercial Deposits
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Consumer Banking and Private Wealth Management
|
|
$41,524
|
|
|
|
$40,238
|
|
|
|
$85,459
|
|
|
|
$84,228
|
|
Wholesale Banking
|
61,359
|
|
|
53,522
|
|
|
42,865
|
|
|
38,654
|
|
||||
Mortgage Banking
|
27,803
|
|
|
27,574
|
|
|
2,220
|
|
|
3,742
|
|
||||
Corporate Other
|
48
|
|
|
38
|
|
|
(72
|
)
|
|
(45
|
)
|
|
Six Months Ended June 30
|
||||||||||||||
|
Average Loans
|
|
Average Consumer
and Commercial Deposits
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Consumer Banking and Private Wealth Management
|
|
$41,395
|
|
|
|
$40,286
|
|
|
|
$84,990
|
|
|
|
$84,625
|
|
Wholesale Banking
|
60,152
|
|
|
53,010
|
|
|
42,498
|
|
|
38,876
|
|
||||
Mortgage Banking
|
28,043
|
|
|
27,784
|
|
|
2,054
|
|
|
3,630
|
|
||||
Corporate Other
|
45
|
|
|
48
|
|
|
(102
|
)
|
|
(17
|
)
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
|
|
|
|
|
Table 24
|
|
Common Stock
1
|
||||||
|
Total number of shares purchased
2
|
|
Average price paid per share
|
|
Number of shares purchased as part of publicly announced plans or programs
|
|
Approximate dollar value of shares
that may yet be purchased under
the plans or programs
($ in millions)
|
January 1 - 31
|
1,354,345
|
|
$36.92
|
|
1,354,345
|
|
$—
|
February 1 - 28
|
—
|
|
—
|
|
—
|
|
—
|
March 1 - 31
|
17,940
|
|
37.36
|
|
—
|
|
—
|
Total during first quarter of 2014
|
1,372,285
|
|
$36.92
|
|
1,354,345
|
|
$—
|
April 1 - 30
|
2,009,900
|
|
$39.76
|
|
2,009,900
|
|
$370
|
May 1 - 31
|
79,000
|
|
37.96
|
|
79,000
|
|
367
|
June 1 - 30
|
—
|
|
—
|
|
—
|
|
367
|
Total during second quarter of 2014
|
2,088,900
|
|
$39.69
|
|
2,088,900
|
|
$367
|
Total year-to-date 2014
|
3,461,185
|
|
$38.60
|
|
3,443,245
|
|
$367
|
|
|
|
|
|
|
|
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
Exhibit
|
Description
|
|
|
3.1
|
Amended and Restated Articles of Incorporation
of the Registrant, restated effective January 16, 2009, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed January 22, 2009, as further amended by Articles of Amendment dated December 19, 2012, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed December 20, 2012.
|
|
*
|
|
|
|
|
3.2
|
Bylaws of the Registrant,
as amended and restated on August 8, 2011, incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q filed August 9, 2011.
|
|
*
|
|
|
|
|
10.1
|
SunTrust Banks, Inc. Annual Incentive Plan,
as amended and restated as of January 1, 2014, incorporated by reference to Appendix B to the Registrant’s Proxy Statement filed March 10, 2014.
|
|
*
|
|
|
|
|
10.2
|
SunTrust Banks, Inc. 2009 Stock Plan,
as amended and restated as of April 22, 2014, incorporated by reference to Appendix A to the Registrant’s Proxy Statement filed March 10, 2014.
|
|
*
|
|
|
|
|
10.3
|
Consent Judgment
between SunTrust Mortgage, Inc. (“SunTrust Mortgage”) on the one hand and the United States Department of Justice, the United States Department of Housing and Urban Development, certain other federal agencies, and the Attorneys General for forty-nine states and the District of Columbia dated as of June 17, 2014.
|
|
**
|
|
|
|
|
10.4
|
Restitution and Remediation Agreement
dated as of July 3, 2014 between SunTrust Mortgage, Inc. and the United States of America, incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed July 3, 2014.
|
|
*
|
|
|
|
|
10.5
|
Executive Severance Plan,
amended and restated as of July 24, 2014.
|
|
**
|
|
|
|
|
10.6
|
Revised Form of Restricted Stock Unit Agreement, 2014 Return on Tangible Common Equity,
incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed on April 23, 2014.
|
|
*
|
|
|
|
|
10.7
|
Revised Form of Time-Vested Restricted Stock Unit Agreement, 2014 Type I,
incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed on April 23, 2014.
|
|
*
|
|
|
|
|
10.8
|
Revised Form of Time-Vested Restricted Stock Unit Agreement, 2014 Type II,
incorporated by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K filed on April 23, 2014.
|
|
*
|
|
|
|
|
31.1
|
Certification of Chairman and Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
**
|
|
|
|
|
31.2
|
Certification of Corporate Executive Vice President and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
**
|
|
|
|
|
32.1
|
Certification of Chairman and Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
**
|
|
|
|
|
32.2
|
Certification of Corporate Executive Vice President and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
**
|
|
|
|
|
101.1
|
Interactive Data File.
|
|
**
|
*
|
incorporated by reference
|
**
|
filed herewith
|
|
|
|
|
|
SunTrust Banks, Inc.
|
|
(Registrant)
|
|
/s/ Thomas E. Panther
|
|
Thomas E. Panther, Senior Vice President and Director of
Corporate Finance and Controller (on behalf of the
Registrant and as Principal Accounting Officer)
|
I.
|
JURISDICTION
|
II.
|
SERVICING STANDARDS
|
III.
|
FINANCIAL TERMS
|
IV.
|
ENFORCEMENT
|
VI.
|
RELEASES
|
I.
|
FORECLOSURE AND BANKRUPTCY INFORMATION AND DOCUMENTATION.
|
A.
|
Standards for Documents Used in Foreclosure and Bankruptcy Proceedings.
|
1.
|
Servicer shall ensure that factual assertions made in pleadings (complaint, counterclaim, cross-claim, answer or similar pleadings), bankruptcy proofs of claim (including any facts provided by Servicer or based on information provided by the Servicer that are included in any attachment and submitted to establish the truth of such facts) (“POC”), Declarations, affidavits, and sworn statements filed by or on behalf of Servicer in judicial foreclosures or bankruptcy proceedings and notices of default, notices of sale and similar notices submitted by or on behalf of Servicer in non-judicial foreclosures are accurate and complete and are supported by competent and reliable evidence. Before a loan is referred to non-judicial foreclosure, Servicer shall ensure that it has reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose, including the borrower’s loan status and loan information.
|
2.
|
Servicer shall ensure that affidavits, sworn statements, and Declarations are based on personal knowledge, which may be based on the affiant’s review of Servicer’s books and records, in accordance with the evidentiary requirements of applicable state or federal law.
|
3.
|
Servicer shall ensure that affidavits, sworn statements and Declarations executed by Servicer’s affiants are based on the affiant’s review and personal knowledge of the accuracy and completeness of the assertions in the affidavit, sworn statement or Declaration, set out facts that Servicer reasonably believes would be admissible in evidence, and show that the affiant is competent to testify on the matters stated. Affiants shall confirm that they have reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose, including the borrower’s loan status and required loan ownership information. If an affiant relies on a review of business records for the basis of its affidavit, the referenced business
|
4.
|
Servicer shall have standards for qualifications, training and supervision of employees. Servicer shall train and supervise employees who regularly prepare or execute affidavits, sworn statements or Declarations. Each such employee shall sign a certification that he or she has received the training. Servicer shall oversee the training completion to ensure each required employee properly and timely completes such training. Servicer shall maintain written records confirming that each such employee has completed the training and the subjects covered by the training.
|
5.
|
Servicer shall review and approve standardized forms of affidavits, standardized forms of sworn statements, and standardized forms of Declarations prepared by or signed by an employee or officer of Servicer, or executed by a third party using a power of attorney on behalf of Servicer, to ensure compliance with applicable law, rules, court procedure, and the terms of this Agreement (“the Agreement”).
|
6.
|
Affidavits, sworn statements and Declarations shall accurately identify the name of the affiant, the entity of which the affiant is an employee, and the affiant’s title.
|
7.
|
Affidavits, sworn statements and Declarations, including their notarization, shall fully comply with all applicable state law requirements.
|
8.
|
Affidavits, sworn statements and Declarations shall not contain information that is false or unsubstantiated. This requirement shall not preclude Declarations based on information and belief where so stated.
|
9.
|
Servicer shall assess and ensure that it has an adequate number of employees and that employees have reasonable time to prepare, verify, and execute pleadings, POCs, motions for relief from stay (“MRS”), affidavits, sworn statements and Declarations.
|
10.
|
Servicer shall not pay volume-based or other incentives to employees or third-party providers or trustees that encourage undue haste or lack of due diligence over quality.
|
11.
|
Affiants shall be individuals, not entities, and affidavits, sworn statements and Declarations shall be signed by hand signature of the affiant (except
|
12.
|
At the time of execution, all information required by a form affidavit, sworn statement or Declaration shall be complete.
|
13.
|
Affiants shall date their signatures on affidavits, sworn statements or Declarations.
|
14.
|
Servicer shall maintain records that identify all notarizations of Servicer documents executed by each notary employed by Servicer.
|
15.
|
Servicer shall not file a POC in a bankruptcy proceeding which, when filed, contained materially inaccurate information. In cases in which such a POC may have been filed, Servicer shall not rely on such POC and shall (a) in active cases, at Servicer’s expense, take appropriate action, consistent with state and federal law and court procedure, to substitute such POC with an amended POC as promptly as reasonably practicable (and, in any event, not more than 30 days) after acquiring actual knowledge of such material inaccuracy and provide appropriate written notice to the borrower or borrower’s counsel; and (b) in other cases, at Servicer’s expense, take appropriate action after acquiring actual knowledge of such material inaccuracy.
|
16.
|
Servicer shall not rely on an affidavit of indebtedness or similar affidavit, sworn statement or Declaration filed in a pending pre-judgment judicial foreclosure or bankruptcy proceeding which (a) was required to be based on the affiant’s review and personal knowledge of its accuracy but was not, (b) was not, when so required, properly notarized, or (c) contained materially inaccurate information in order to obtain a judgment of foreclosure, order of sale, relief from the automatic stay or other relief in bankruptcy. In pending cases in which such affidavits, sworn statements or Declarations may have been filed, Servicer shall, at Servicer’s expense, take appropriate action, consistent with state and federal law and court procedure, to substitute such affidavits with new affidavits and provide appropriate written notice to the borrower or borrower’s counsel.
|
17.
|
In pending post-judgment, pre-sale cases in judicial foreclosure proceedings in which an affidavit or sworn statement was filed which was required to be based on the affiant’s review and personal knowledge of its accuracy but may not have been, or that may not have, when so required, been properly notarized, and such affidavit or sworn statement has not been re-filed, Servicer, unless prohibited by state or local law or court rule, will provide written notice to borrower at borrower’s address of record or borrower’s counsel prior to proceeding with a foreclosure sale or eviction proceeding.
|
18.
|
In all states, Servicer shall send borrowers a statement setting forth facts supporting Servicer’s or holder’s right to foreclose and containing the information required in paragraphs I.B.6 (items available upon borrower request), I.B.10 (account statement), I.C.2 and I.C.3 (ownership statement), and IV.B.13 (loss mitigation statement) herein. Servicer shall send this statement to the borrower in one or more communications no later than 14 days prior to referral to foreclosure attorney or foreclosure trustee. Servicer shall provide the Monitoring Committee with copies of proposed form statements for review before implementation.
|
B.
|
Requirements for Accuracy and Verification of Borrower’s Account Information.
|
1.
|
Servicer shall maintain procedures to ensure accuracy and timely updating of borrower’s account information, including posting of payments and imposition of fees. Servicer shall also maintain adequate documentation of borrower account information, which may be in either electronic or paper format.
|
2.
|
For any loan on which interest is calculated based on a daily accrual or daily interest method and as to which any obligor is not a debtor in a bankruptcy proceeding without reaffirmation, Servicer shall promptly accept and apply all borrower payments, including cure payments (where authorized by law or contract), trial modification payments, as well as non- conforming payments, unless such application conflicts with contract provisions or prevailing law. Servicer shall ensure that properly identified payments shall be posted no more than two business days after receipt at the address specified by Servicer and credited as of the date received to borrower’s account. Each monthly payment shall be applied in the order specified in the loan documents.
|
3.
|
For any loan on which interest is not calculated based on a daily accrual or daily interest method and as to which any obligor is not a debtor in a bankruptcy proceeding without reaffirmation, Servicer shall promptly accept and apply all borrower conforming payments, including cure payments (where authorized by law or contract), unless such application conflicts with contract provisions or prevailing law. Servicer shall continue to accept trial modification payments consistent with existing payment application practices. Servicer shall ensure that properly identified payments shall be posted no more than two business days after receipt at the address specified by Servicer. Each monthly payment shall be applied in the order specified in the loan documents.
|
a.
|
Servicer shall accept and apply at least two non-conforming payments from the borrower, in accordance with this subparagraph, when the payment, whether on its own or when combined with a payment made by another source, comes within
|
b.
|
Except for payments described in paragraph I.B.3.a, Servicer may post partial payments to a suspense or unapplied funds account,
|
4.
|
Notwithstanding the provisions above, Servicer shall not be required to accept payments which are insufficient to pay the full balance due after the borrower has been provided written notice that the contract has been declared in default and the remaining payments due under the contract have been accelerated.
|
5.
|
Servicer shall provide to borrowers (other than borrowers in bankruptcy or borrowers who have been referred to or are going through foreclosure) adequate information on monthly billing or other account statements to show in clear and conspicuous language:
|
a.
|
total amount due;
|
b.
|
allocation of payments, including a notation if any payment has been posted to a “suspense or unapplied funds account”;
|
c.
|
unpaid principal;
|
d.
|
fees and charges for the relevant time period;
|
e.
|
current escrow balance; and
|
f.
|
reasons for any payment changes, including an interest rate or escrow account adjustment, no later than 21 days before the new amount is due (except in the case of loans as to which interest accrues daily or the rate changes more frequently than once every 30 days);
|
6.
|
In the statements described in paragraphs I.A.18 and III.B.1.a, Servicer shall notify borrowers that they may receive, upon written request:
|
a.
|
A copy of the borrower’s payment history since the borrower was last less than 60 days past due;
|
b.
|
A copy of the borrower’s note;
|
c.
|
If Servicer has commenced foreclosure or filed a POC, copies of any assignments of mortgage or deed of trust required to demonstrate the right to foreclose on the borrower’s note under applicable state law; and
|
d.
|
The name of the investor that holds the borrower’s loan.
|
7.
|
Servicer shall adopt enhanced billing dispute procedures, including for disputes regarding fees. These procedures will include:
|
a.
|
Establishing readily available methods for customers to lodge complaints and pose questions, such as by providing toll-free numbers and accepting disputes by email;
|
b.
|
Assessing and ensuring adequate and competent staff to answer and respond to consumer disputes promptly;
|
c.
|
Establishing a process for dispute escalation;
|
d.
|
Tracking the resolution of complaints; and
|
e.
|
Providing a toll-free number on monthly billing statements.
|
8.
|
Servicer shall take appropriate action to promptly remediate any inaccuracies in borrowers’ account information, including:
|
a.
|
Correcting the account information;
|
b.
|
Providing cash refunds or account credits; and
|
c.
|
Correcting inaccurate reports to consumer credit reporting agencies.
|
9.
|
Servicer’s systems to record account information shall be periodically independently reviewed for accuracy and completeness by an independent reviewer.
|
10.
|
As indicated in paragraph I.A.18, Servicer shall send the borrower an itemized plain language account summary setting forth each of the following items, to the extent applicable:
|
a.
|
The total amount needed to reinstate or bring the account current, and the amount of the principal obligation under the mortgage;
|
b.
|
The date through which the borrower’s obligation is paid;
|
c.
|
The date of the last full payment;
|
d.
|
The current interest rate in effect for the loan (if the rate is effective for at least 30 days);
|
e.
|
The date on which the interest rate may next reset or adjust (unless the rate changes more frequently than once every 30 days);
|
f.
|
The amount of any prepayment fee to be charged, if any;
|
g.
|
A description of any late payment fees;
|
h.
|
A telephone number or electronic mail address that may be used by the obligor to obtain information regarding the mortgage; and
|
i.
|
The names, addresses, telephone numbers, and Internet addresses of one or more counseling agencies or programs approved by HUD (http://ww
w.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
).
|
11.
|
In active chapter 13 cases, Servicer shall ensure that:
|
a.
|
prompt and proper application of payments is made on account of
|
b.
|
the debtor is treated as being current so long as the debtor is making payments in accordance with the terms of the then-effective confirmed plan and any later effective payment change notices; and
|
c.
|
as of the date of dismissal of a debtor’s bankruptcy case, entry of an order granting Servicer relief from the stay, or entry of an order granting the debtor a discharge, there is a reconciliation of payments received with respect to the debtor’s obligations during the case and appropriately update the Servicer’s systems of record. In connection with such reconciliation, Servicer shall reflect the waiver of any fee, expense or charge pursuant to paragraphs III.B.1.c.i or III.B.1.d.
|
C.
|
Documentation of Note, Holder Status and Chain of Assignment.
|
1.
|
Servicer shall implement processes to ensure that Servicer or the foreclosing entity has a documented enforceable interest in the promissory note and mortgage (or deed of trust) under applicable state law, or is otherwise a proper party to the foreclosure action.
|
2.
|
Servicer shall include a statement in a pleading, affidavit of indebtedness or similar affidavits in court foreclosure proceedings setting forth the basis for asserting that the foreclosing party has the right to foreclose.
|
3.
|
Servicer shall set forth the information establishing the party’s right to foreclose as set forth in I.C.2 in a communication to be sent to the borrower as indicated in I.A.18.
|
4.
|
If the original note is lost or otherwise unavailable, Servicer shall comply with applicable law in an attempt to establish ownership of the note and the right to enforcement. Servicer shall ensure good faith efforts to obtain or locate a note lost while in the possession of Servicer or Servicer’s agent and shall ensure that Servicer and Servicer’s agents who are expected to have possession of notes or assignments of mortgage on behalf of Servicer adopt procedures that are designed to provide assurance that the Servicer or Servicer’s agent would locate a note or assignment of mortgage if it is in the possession or control of the Servicer or Servicer’s agent, as the case may be. In the event that Servicer prepares or causes to be prepared a lost note or lost assignment affidavit with respect to an original note or assignment lost while in Servicer’s control, Servicer shall use good faith
|
5.
|
Servicer shall not intentionally destroy or dispose of original notes that are still in force.
|
6.
|
Servicer shall ensure that mortgage assignments executed by or on behalf of Servicer are executed with appropriate legal authority, accurately reflective of the completed transaction and properly acknowledged.
|
D.
|
Bankruptcy Documents.
|
1.
|
Proofs of Claim (“POC”)
. Servicer shall ensure that POCs filed on behalf of Servicer are documented in accordance with the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and any applicable local rule or order (“bankruptcy law”). Unless not permitted by statute or rule, Servicer shall ensure that each POC is documented by attaching:
|
a.
|
The original or a duplicate of the note, including all indorsements; a copy of any mortgage or deed of trust securing the notes (including, if applicable, evidence of recordation in the applicable land records); and copies of any assignments of mortgage or deed
|
b.
|
If, in addition to its principal amount, a claim includes interest, fees, expenses, or other charges incurred before the petition was filed, an itemized statement of the interest, fees, expenses, or charges shall be filed with the POC (including any expenses or charges based on an escrow analysis as of the date of filing) at least in the detail specified in the current draft of Official Form B 10 (effective December 2011) (“Official Form B 10”
)
|
c.
|
A statement of the amount necessary to cure any default as of the date of the petition shall be filed with the POC.
|
d.
|
If a security interest is claimed in property that is the debtor’s principal residence, the attachment prescribed by the appropriate Official Form shall be filed with the POC.
|
e.
|
Servicer shall include a statement in a POC setting forth the basis for asserting that the applicable party has the right to
|
f.
|
The POC shall be signed (either by hand or by appropriate electronic signature) by the responsible person under penalty of perjury after reasonable investigation, stating that the information set forth in the POC is true and correct to the best of such responsible person’s knowledge, information, and reasonable belief, and clearly identify the responsible person’s employer and position or title with the employer.
|
2.
|
Motions for Relief from Stay (“MRS”)
. Unless not permitted by bankruptcy law, Servicer shall ensure that each MRS in a chapter 13 proceeding is documented by attaching:
|
a.
|
To the extent not previously submitted with a POC, a copy of the Loan Documents; if such documents were previously submitted with a POC, a statement to that effect. If the promissory note has been lost or destroyed, a lost note affidavit shall be submitted;
|
b.
|
To the extent not previously submitted with a POC, Servicer shall include a statement in an MRS setting forth the basis for asserting that the applicable party has the right to foreclose.
|
c.
|
An affidavit, sworn statement or Declaration made by Servicer or based on information provided by Servicer (“MRS affidavit” (which term includes, without limitation, any facts provided by Servicer that are included in any attachment and submitted to establish the truth of such facts) setting forth:
|
i.
|
whether there has been a default in paying pre-petition arrearage or post-petition amounts (an “MRS delinquency”);
|
ii.
|
if there has been such a default, (a) the unpaid principal balance, (b) a description of any default with respect to the pre-petition arrearage, (c) a description of any default with respect to the post-petition amount (including, if applicable, any escrow shortage), (d) the amount of the pre-petition arrearage (if applicable), (e) the post-petition payment amount, (f) for the period since the date of the first post- petition or pre-petition default that is continuing and has not been cured, the date and amount of each payment made (including escrow payments) and the application of each such payment, and (g) the amount, date and description of each fee or charge applied to such pre-petition amount or post-petition amount since the later of the date of the petition or the preceding statement pursuant to paragraph III.B.1.a; and
|
iii.
|
all amounts claimed, including a statement of the amount necessary to cure any default on or about the date of the
|
d.
|
All other attachments prescribed by statute, rule, or law.
|
e.
|
Servicer shall ensure that any MRS discloses the terms of any trial period or permanent loan modification plan pending at the time of filing of a MRS or whether the debtor is being evaluated for a loss mitigation option.
|
E.
|
Quality Assurance Systems Review.
|
1.
|
Servicer shall conduct regular reviews, not less than quarterly, of a statistically valid sample of affidavits, sworn statements, Declarations filed by or on behalf of Servicer in judicial foreclosures or bankruptcy proceedings and notices of default, notices of sale and similar notices submitted in non-judicial foreclosures to ensure that the documents are accurate and comply with prevailing law and this Agreement.
|
a.
|
The reviews shall also verify the accuracy of the statements in affidavits, sworn statements, Declarations and documents used to foreclose in non-judicial foreclosures, the account summary described in paragraph I.B.10, the ownership statement described in paragraph I.C.2, and the loss mitigation statement described in paragraph IV.B.13 by reviewing the underlying information. Servicer shall take appropriate remedial steps if deficiencies are identified, including appropriate remediation in individual cases.
|
b.
|
The reviews shall also verify the accuracy of the statements in affidavits, sworn statements and Declarations submitted in bankruptcy proceedings. Servicer shall take appropriate remedial steps if deficiencies are identified, including appropriate remediation in individual cases.
|
2.
|
The quality assurance steps set forth above shall be conducted by Servicer
|
3.
|
Servicer shall conduct regular pre-filing reviews of a statistically valid sample of POCs to ensure that the POCs are accurate and comply with prevailing law and this Agreement. The reviews shall also verify the accuracy of the statements in POCs. Servicer shall take appropriate remedial steps if deficiencies are identified, including appropriate remediation in individual cases. The pre-filing review shall be conducted by Servicer employees who are separate and independent of the persons who prepared the applicable POCs.
|
4.
|
Servicer shall regularly review and assess the adequacy of its internal controls and procedures with respect to its obligations under this Agreement, and implement appropriate procedures to address deficiencies.
|
II.
|
THIRD-PARTY PROVIDER OVERSIGHT.
|
A.
|
Oversight Duties Applicable to All Third-Party Providers.
|
1.
|
Servicer shall perform appropriate due diligence of Third-Party Providers’ qualifications, expertise, capacity, reputation, complaints, information security, document custody practices, business continuity, and financial viability.
|
2.
|
Servicer shall amend agreements, engagement letters, or oversight policies, or enter into new agreements or engagement letters, with Third-Party Providers to require them to comply with Servicer’s applicable policies and procedures (which will incorporate any applicable aspects of this Agreement) and applicable state and federal laws and rules.
|
3.
|
Servicer shall ensure that agreements, contracts or oversight policies provide for adequate oversight, including measures to enforce Third-Party Provider contractual obligations, and to ensure timely action with respect to Third-Party Provider performance failures.
|
4.
|
Servicer shall ensure that foreclosure and bankruptcy counsel and foreclosure trustees have appropriate access to information from Servicer’s books and records necessary to perform their duties in preparing pleadings and other documents submitted in foreclosure and bankruptcy proceedings.
|
5.
|
Servicer shall ensure that all information provided by or on behalf of Servicer to Third-Party Providers in connection with providing Servicing Activities is accurate and complete.
|
6.
|
Servicer shall conduct periodic reviews of Third-Party Providers. These reviews shall include:
|
a.
|
A review of a sample of the foreclosure and bankruptcy documents prepared by the Third-Party Provider, to provide for compliance with applicable state and federal law and this Agreement in connection with the preparation of the documents, and the accuracy of the facts contained therein;
|
b.
|
A review of the fees and costs assessed by the Third-Party Provider to provide that only fees and costs that are lawful, reasonable and actually incurred are charged to borrowers and that no portion of any fees or charges incurred by any Third-Party Provider for technology usage, connectivity, or electronic invoice submission is charged as a cost to the borrower;
|
c.
|
A review of the Third-Party Provider’s processes to provide for compliance with the Servicer’s policies and procedures concerning Servicing Activities;
|
d.
|
A review of the security of original loan documents maintained by the Third-Party Provider;
|
e.
|
A requirement that the Third-Party Provider disclose to the Servicer any imposition of sanctions or professional disciplinary action taken against them for misconduct related to performance of Servicing Activities; and
|
f.
|
An assessment of whether bankruptcy attorneys comply with the best practice of determining whether a borrower has made a payment curing any MRS delinquency within two business days of the scheduled hearing date of the related MRS.
|
7.
|
Servicer shall take appropriate remedial steps if problems are identified through this review or otherwise, including, when appropriate, terminating its relationship with the Third-Party Provider.
|
8.
|
Servicer shall adopt processes for reviewing and appropriately addressing customer complaints it receives about Third-Party Provider services.
|
9.
|
Servicer shall regularly review and assess the adequacy of its internal controls and procedures with respect to its obligations under this Section, and take appropriate remedial steps if deficiencies are identified, including appropriate remediation in individual cases
|
B.
|
Additional Oversight of Activities by Third-Party Providers.
|
1.
|
Servicer shall require a certification process for law firms (and recertification of existing law firm providers) that provide residential mortgage foreclosure and bankruptcy services for Servicer, on a periodic basis, as qualified to serve as a Third-Party Provider to Servicer, including that attorneys have the experience and competence necessary to perform the services requested.
|
2.
|
Servicer shall ensure that attorneys are licensed to practice in the relevant jurisdiction, have the experience and competence necessary to perform the services requested, and that their services comply with applicable rules, regulations and applicable law (including state law prohibitions on fee splitting).
|
3.
|
Servicer shall ensure that foreclosure and bankruptcy counsel and foreclosure trustees have an appropriate Servicer contact to assist in legal proceedings and to facilitate loss mitigation questions on behalf of the borrower.
|
4.
|
Servicer shall adopt policies requiring Third-Party Providers to maintain records that identify all notarizations of Servicer documents executed by each notary employed by the Third-Party Provider.
|
III.
|
BANKRUPTCY.
|
A.
|
General.
|
1.
|
The provisions, conditions and obligations imposed herein are intended to be interpreted in accordance with applicable federal, state and local laws, rules and regulations. Nothing herein shall require a Servicer to do anything inconsistent with applicable state or federal law, including the applicable bankruptcy law or a court order in a bankruptcy case.
|
2.
|
Servicer shall ensure that employees who are regularly engaged in servicing mortgage loans as to which the borrower or mortgagor is in bankruptcy receive training specifically addressing bankruptcy issues.
|
B.
|
Chapter 13 Cases.
|
1.
|
In any chapter 13 case, Servicer shall ensure that:
|
a.
|
So long as the debtor is in a chapter 13 case, within 180 days after the date on which the fees, expenses, or charges are incurred, file and serve on the debtor, debtor’s counsel, and the trustee a notice in a form consistent with Official Form B10 (Supplement 2) itemizing fees, expenses, or charges (1) that were incurred in connection with the claim after the bankruptcy case was filed, (2) that the holder asserts are recoverable against the debtor or against the debtor’s principal residence, and (3) that the holder intends to collect from the debtor.
|
b.
|
Servicer replies within time periods established under bankruptcy law to any notice that the debtor has completed all payments under the plan or otherwise paid in full the amount required to cure any pre-petition default.
|
c.
|
If the Servicer fails to provide information as required by paragraph III.B.1.a with respect to a fee, expense or charge within 180 days of the incurrence of such fee, expense, or charge, then,
|
i.
|
Except for independent charges (“Independent charge”) paid by the Servicer that is either (A) specifically authorized by the borrower or (B) consists of amounts advanced by Servicer in respect of taxes, homeowners association fees, liens or insurance, such fee, expense or charge shall be deemed waived and may not be collected from the borrower.
|
ii.
|
In the case of an Independent charge, the court may, after notice and hearing, take either or both of the following actions:
|
(a)
|
preclude the holder from presenting the omitted information, in any form, as evidence in any contested matter or adversary proceeding in the case, unless the court determines that the failure was substantially justified or is harmless; or
|
(b)
|
award other appropriate relief, including reasonable expenses and attorney’s fees caused by the failure.
|
d.
|
If the Servicer fails to provide information as required by paragraphs III.B.1.a or III.B.1.b and bankruptcy law with respect to a fee, expense or charge (other than an Independent Charge) incurred more than 45 days before the date of the reply referred to in paragraph III.B.1.b, then such fee, expense or charge shall be deemed waived and may not be collected from the borrower.
|
e.
|
Servicer shall file and serve on the debtor, debtor’s counsel, and the trustee a notice in a form consistent with the current draft of Official Form B10 (Supplement 1) (effective December 2011) of any change in the payment amount, including any change that results from an interest rate or escrow account adjustment, no later than 21 days before a payment in the new amount is due. Servicer shall waive and not collect any late charge or other fees imposed solely as a result of the failure of the borrower timely to make a payment attributable to the failure of Servicer to give such notice timely.
|
IV.
|
LOSS MITIGATION.
|
A.
|
Loss Mitigation Requirements.
|
1.
|
Servicer shall be required to notify potentially eligible borrowers of currently available loss mitigation options prior to foreclosure referral. Upon the timely receipt of a complete loan modification application, Servicer shall evaluate borrowers for all available loan modification options for which they are eligible prior to referring a borrower to foreclosure and shall facilitate the submission and review of loss mitigation applications. The foregoing notwithstanding, Servicer shall have no obligation to solicit borrowers who are in bankruptcy.
|
2.
|
Servicer shall offer and facilitate loan modifications for borrowers
|
3.
|
Servicer shall allow borrowers enrolled in a trial period plan under prior HAMP guidelines (where borrowers were not pre-qualified) and who made all required trial period payments, but were later denied a permanent modification, the opportunity to reapply for a HAMP or proprietary loan modification using current financial information.
|
4.
|
Servicer shall promptly send a final modification agreement to borrowers who have enrolled in a trial period plan under current HAMP guidelines (or fully underwritten proprietary modification programs with a trial payment period) and who have made the required number of timely trial period payments, where the modification is underwritten prior to the trial period and has received any necessary investor, guarantor or insurer approvals. The borrower shall then be converted by Servicer to a permanent modification upon execution of the final modification documents, consistent with applicable program guidelines, absent evidence of fraud.
|
B.
|
Dual Track Restricted.
|
1.
|
If a borrower has not already been referred to foreclosure, Servicer shall not refer an eligible borrower’s account to foreclosure while the borrower’s complete application for any loan modification program is pending if Servicer received (a) a complete loan modification application no later than day 120 of delinquency, or (b) a substantially complete loan modification application (missing only any required documentation of hardship) no later than day 120 of delinquency and Servicer receives any required hardship documentation no later than day 130 of delinquency. Servicer shall not make a referral to foreclosure of an eligible borrower who so provided an application until:
|
a.
|
Servicer determines (after the automatic review in paragraph IV.G.1) that the borrower is not eligible for a loan modification, or
|
b.
|
If borrower does not accept an offered foreclosure prevention alternative within 14 days of the evaluation notice, the earlier of (i) such 14 days, and (ii) borrower’s decline of the foreclosure prevention offer.
|
2.
|
If borrower accepts the loan modification resulting from Servicer’s evaluation of the complete loan modification application referred to in paragraph IV.B.1 (verbally, in writing (including e-mail responses) or by submitting the first trial modification payment) within 14 days of Servicer’s offer of a loan modification, then the Servicer shall delay referral to foreclosure until (a) if the Servicer fails timely to receive the
|
3.
|
If the loan modification requested by a borrower as described in paragraph IV.B.1 is denied, except when otherwise required by federal or state law or investor directives, if borrower is entitled to an appeal under paragraph IV.G.3, Servicer will not proceed to a foreclosure sale until the later of (if applicable):
|
a.
|
expiration of the 30-day appeal period; and
|
b.
|
if the borrower appeals the denial, until the later of (if applicable)
|
4.
|
If, after an eligible borrower has been referred to foreclosure, the Servicer receives a complete application from the borrower within 30 days after the Post Referral to Foreclosure Solicitation Letter, then while such loan modification application is pending, Servicer shall not move for foreclosure judgment or order of sale (or, if a motion has already been filed, shall take reasonable steps to avoid a ruling on such motion), or seek a foreclosure sale. If Servicer offers the borrower a loan modification, Servicer shall not move for judgment or order of sale, (or, if a motion has already been filed, shall take reasonable steps to avoid a ruling on such motion), or seek a foreclosure sale until the earlier of (a) 14 days after the date of the related offer of a loan modification, and (b) the date the borrower declines the loan modification offer. If the borrower accepts the loan modification offer (verbally, in writing (including e-mail responses) or by submitting the first trial modification payment) within 14 days after the date of the related offer of loan modification, Servicer shall continue this delay until the later of (if applicable) (A) the failure by the Servicer timely to receive the first trial period payment, and (B) if the Servicer timely receives the first trial period payment, after the borrower breaches the trial plan.
|
5.
|
If the loan modification requested by a borrower described in paragraph IV.B.4 is denied, then, except when otherwise required by federal or state law or investor directives, if borrower is entitled to an appeal under
|
a.
|
expiration of the 30-day appeal period; and
|
b.
|
if the borrower appeals the denial, until the later of (if applicable)
|
6.
|
If, after an eligible borrower has been referred to foreclosure, Servicer receives a complete loan modification application more than 30 days after the Post Referral to Foreclosure Solicitation Letter, but more than 37 days before a foreclosure sale is scheduled, then while such loan modification application is pending, Servicer shall not proceed with the foreclosure sale. If Servicer offers a loan modification, then Servicer shall delay the foreclosure sale until the earlier of (i) 14 days after the date of the related offer of loan modification, and (ii) the date the borrower declines the loan modification offer. If the borrower accepts the loan modification offer (verbally, in writing (including e-mail responses) or by submitting the first trial modification payment) within 14 days, Servicer shall delay the foreclosure sale until the later of (if applicable) (A) the failure by the Servicer timely to receive the first trial period payment, and (B) if the Servicer timely receives the first trial period payment, after the borrower breaches the trial plan.
|
7.
|
If the loan modification requested by a borrower described in paragraph IV.B.6 is denied and it is reasonable to believe that more than 90 days remains until a scheduled foreclosure date or the first date on which a sale could reasonably be expected to be scheduled and occur, then, except when otherwise required by federal or state law or investor directives, if borrower is entitled to an appeal under paragraph IV.G.3.a, Servicer will not proceed to a foreclosure sale until the later of (if applicable):
|
a.
|
expiration of the 30-day appeal period; and
|
b.
|
if the borrower appeals the denial, until the later of (if applicable)
|
8.
|
If, after an eligible borrower has been referred to foreclosure, Servicer receives a complete loan modification application more than 30 days after the Post Referral to Foreclosure Solicitation Letter, but within 37 to 15 days before a foreclosure sale is scheduled, then Servicer shall conduct an expedited review of the borrower and, if the borrower is extended a loan modification offer, Servicer shall postpone any foreclosure sale until the earlier of (a) 14 days after the date of the related evaluation notice, and (b) the date the borrower declines the loan modification offer. If the borrower timely accepts the loan modification offer (either in writing or by submitting the first trial modification payment), Servicer shall delay the foreclosure sale until the later of (if applicable) (A) the failure by the Servicer timely to receive the first trial period payment, and (B) if the Servicer timely receives the first trial period payment, after the borrower breaches the trial plan.
|
9.
|
If, after an eligible borrower has been referred to foreclosure, the Servicer receives a complete loan modification application more than 30 days after the Post Referral to Foreclosure Solicitation Letter and less than 15 days before a scheduled foreclosure sale, Servicer must notify the borrower before the foreclosure sale date as to Servicer’s determination (if its review was completed) or inability to complete its review of the loan modification application. If Servicer makes a loan modification offer to the borrower, then Servicer shall postpone any sale until the earlier of (a) 14 days after the date of the related evaluation notice, and (b) the date the borrower declines the loan modification offer. If the borrower timely accepts a loan modification offer (either in writing or by submitting the first trial modification payment), Servicer shall delay the foreclosure sale until the later of (if applicable) (A) the failure by the Servicer timely to receive the first trial period payment, and (B) if the Servicer timely receives the first trial period payment, after the borrower breaches the trial plan.
|
10.
|
For purposes of this section IV.B, Servicer shall not be responsible for failing to obtain a delay in a ruling on a judgment or failing to delay a foreclosure sale if Servicer made a request for such delay, pursuant to any state or local law, court rule or customary practice, and such request was not approved.
|
11.
|
Servicer shall not move to judgment or order of sale or proceed with a foreclosure sale under any of the following circumstances:
|
a.
|
The borrower is in compliance with the terms of a trial
|
b.
|
A short sale or deed-in-lieu of foreclosure has been approved by all parties (including, for example, first lien investor, junior lien holder and mortgage insurer, as applicable), and proof of funds or financing has been provided to Servicer.
|
12.
|
If a foreclosure or trustee’s sale is continued (rather than cancelled) to provide time to evaluate loss mitigation options, Servicer shall promptly notify borrower in writing of the new date of sale (without delaying any related foreclosure sale).
|
13.
|
As indicated in paragraph I.A.18, Servicer shall send a statement to the borrower outlining loss mitigation efforts undertaken with respect to the borrower prior to foreclosure referral. If no loss mitigation efforts were offered or undertaken, Servicer shall state whether it contacted or attempted to contact the borrower and, if applicable, why the borrower was ineligible for a loan modification or other loss mitigation options.
|
14.
|
Servicer shall ensure timely and accurate communication of or access to relevant loss mitigation status and changes in status to its foreclosure attorneys, bankruptcy attorneys and foreclosure trustees and, where applicable, to court-mandated mediators.
|
C.
|
Single Point of Contact.
|
1.
|
Servicer shall establish an easily accessible and reliable single point of contact (“SPOC”) for each potentially-eligible first lien mortgage borrower so that the borrower has access to an employee of Servicer to obtain information throughout the loss mitigation, loan modification and foreclosure processes.
|
2.
|
Servicer shall initially identify the SPOC to the borrower promptly after a potentially-eligible borrower requests loss mitigation assistance. Servicer shall provide one or more direct means of communication with the SPOC on loss mitigation-related correspondence with the borrower. Servicer shall promptly provide updated contact information to the borrower if the designated SPOC is reassigned, no longer employed by Servicer, or otherwise not able to act as the primary point of contact.
|
a.
|
Servicer shall ensure that debtors in bankruptcy are assigned to a SPOC specially trained in bankruptcy issues.
|
3.
|
The SPOC shall have primary responsibility for:
|
a.
|
Communicating the options available to the borrower, the actions the borrower must take to be considered for these options and the status of Servicer’s evaluation of the borrower for these options;
|
b.
|
Coordinating receipt of all documents associated with loan modification or loss mitigation activities;
|
c.
|
Being knowledgeable about the borrower’s situation and current
|
d.
|
Ensuring that a borrower who is not eligible for MHA programs is considered for proprietary or other investor loss mitigation options.
|
4.
|
The SPOC shall, at a minimum, provide the following services to borrowers:
|
a.
|
Contact borrower and introduce himself/herself as the borrower’s SPOC;
|
b.
|
Explain programs for which the borrower is eligible;
|
c.
|
Explain the requirements of the programs for which the borrower is eligible;
|
d.
|
Explain program documentation requirements;
|
e.
|
Provide basic information about the status of borrower’s account, including pending loan modification applications, other loss mitigation alternatives, and foreclosure activity;
|
f.
|
Notify borrower of missing documents and provide an address or electronic means for submission of documents by borrower in order to complete the loan modification application;
|
g.
|
Communicate Servicer’s decision regarding loan modification applications and other loss mitigation alternatives to borrower in writing;
|
h.
|
Assist the borrower in pursuing alternative non-foreclosure options upon denial of a loan modification;
|
i.
|
If a loan modification is approved, call borrower to explain the program;
|
j.
|
Provide information regarding credit counseling where necessary;
|
k.
|
Help to clear for borrower any internal processing requirements; and
|
l.
|
Have access to individuals with the ability to stop foreclosure proceedings when necessary to comply with the MHA Program or this Agreement.
|
5.
|
The SPOC shall remain assigned to borrower’s account and available to borrower until such time as Servicer determines in good faith that all loss mitigation options have been exhausted, borrower’s account becomes current or, in the case of a borrower in bankruptcy, the borrower has exhausted all loss mitigation options for which the borrower is potentially eligible and has applied
|
6.
|
Servicer shall ensure that a SPOC can refer and transfer a borrower to an appropriate supervisor upon request of the borrower.
|
7.
|
Servicer shall ensure that relevant records relating to borrower’s account are promptly available to the borrower’s SPOC, so that the SPOC can timely, adequately and accurately inform the borrower of the current status of loss mitigation, loan modification, and foreclosure activities.
|
8.
|
Servicer shall designate one or more management level employees to be the primary contact for the Attorneys General, state financial regulators, the Executive Office of U.S. Trustee, each regional office of the U.S. Trustee, and federal regulators for communication regarding complaints and inquiries from individual borrowers who are in default and/or have applied for loan modifications. Servicer shall provide a written acknowledgment to all such inquiries within 10 business days. Servicer shall provide a substantive written response to all such inquiries within 30 days. Servicer shall provide relevant loan information to borrower and to Attorneys General, state financial regulators, federal regulators, the Executive Office of the U.S. Trustee, and each U.S. Trustee upon written request and if properly authorized. A written complaint filed by a borrower and forwarded by a state Attorney General or financial regulatory agency to Servicer shall be deemed to have proper authorization.
|
9.
|
Servicer shall establish and make available to Chapter 13 trustees a toll- free number staffed by persons trained in bankruptcy to respond to inquiries from Chapter 13 trustees.
|
D.
|
Loss Mitigation Communications with Borrowers.
|
1.
|
Servicer shall commence outreach efforts to communicate loss mitigation options for first lien mortgage loans to all potentially eligible delinquent borrowers (other than those in bankruptcy) beginning on timelines that are in accordance with HAMP borrower solicitation guidelines set forth in the MHA Handbook version 3.2, Chapter II, Section 2.2, regardless of whether the borrower is eligible for a HAMP modification. Servicer shall provide borrowers with notices that include contact information for national or state foreclosure assistance hotlines and state housing counseling resources, as appropriate. The use by Servicer of nothing more than prerecorded automatic messages in loss mitigation communications with borrowers shall not be sufficient in those instances in which it fails to result in contact between the borrower and one of Servicer’s loss mitigation specialists. Servicer shall conduct affirmative outreach efforts to inform delinquent second lien borrowers (other than those in bankruptcy about the availability of payment reduction options. The foregoing notwithstanding, Servicer shall have no obligation to solicit borrowers who are in bankruptcy.
|
2.
|
Servicer shall disclose and provide accurate information to borrowers relating to the qualification process and eligibility factors for loss mitigation programs.
|
3.
|
Servicer shall communicate, at the written request of the borrower, with
|
4.
|
Servicer shall cease all collection efforts while the borrower (i) is making timely payments under a trial loan modification or (ii) has submitted a complete loan modification application, and a modification decision is pending. Notwithstanding the above, Servicer reserves the right to contact a borrower to gather required loss mitigation documentation or to assist a borrower with performance under a trial loan modification plan.
|
5.
|
Servicer shall consider partnering with third parties, including national chain retailers, and shall consider the use of select bank branches affiliated with Servicer, to set up programs to allow borrowers to copy, fax, scan, transmit by overnight delivery, or mail or email documents to Servicer free of charge.
|
6.
|
Within five business days after referral to foreclosure, the Servicer (including any attorney (or trustee) conducting foreclosure proceedings at the direction of the Servicer) shall send a written communication (“Post Referral to Foreclosure Solicitation Letter”) to the borrower that includes clear language that:
|
a.
|
The Servicer may have sent to the borrower one or more borrower solicitation communications;
|
b.
|
The borrower can still be evaluated for alternatives to foreclosure even if he or she had previously shown no interest;
|
c.
|
The borrower should contact the Servicer to obtain a loss mitigation application package;
|
d.
|
The borrower must submit a loan modification application to the Servicer to request consideration for available foreclosure prevention alternatives;
|
e.
|
Provides the Servicer’s contact information for submitting a complete loan modification application, including the Servicer’s toll-free number; and
|
f.
|
Unless the form of letter is otherwise specified by investor directive or state law or the borrower is not eligible for an appeal under paragraph IV.G.3.a, states that if the borrower is contemplating or has pending an appeal of an earlier denial of a loan modification application, that he or she may submit a loan modification application in lieu of his or her appeal within 30 days after the Post Referral to Foreclosure Solicitation Letter.
|
E.
|
Development of Loan Portals.
|
1.
|
Servicer shall develop or contract with a third-party vendor to develop an online portal linked to Servicer’s primary servicing system where borrowers can check, at no cost, the status of their first lien loan modifications.
|
2.
|
Servicer shall design portals that may, among other things:
|
a.
|
Enable borrowers to submit documents electronically;
|
b.
|
Provide an electronic receipt for any documents submitted;
|
c.
|
Provide information and eligibility factors for proprietary loan modification and other loss mitigation programs; and
|
d.
|
Permit Servicer to communicate with borrowers to satisfy any written communications required to be provided by Servicer, if borrowers submit documents electronically.
|
3.
|
Servicer shall participate in the development and implementation of a neutral, nationwide loan portal system linked to Servicer’s primary servicing system, such as Hope LoanPort to enhance communications with housing counselors, including using the technology used for the Borrower Portal, and containing similar features to the Borrower Portal.
|
4.
|
Servicer shall update the status of each pending loan modification on these portals at least every 10 business days and ensure that each portal is updated on such a schedule as to maintain consistency.
|
F.
|
Loan Modification Timelines.
|
1.
|
Servicer shall provide written acknowledgement of the receipt of documentation submitted by the borrower in connection with a first lien loan modification application within 3 business days. In its initial acknowledgment, Servicer shall briefly describe the loan modification process and identify deadlines and expiration dates for submitted documents.
|
2.
|
Servicer shall notify borrower of any known deficiency in borrower’s initial submission of information, no later than 5 business days after receipt, including any missing information or documentation required for the loan modification to be considered complete.
|
3.
|
Subject to section IV.B, Servicer shall afford borrower 30 days from the date of Servicer’s notification of any missing information or documentation to supplement borrower’s submission of information prior to making a determination on whether or not to grant an initial loan modification.
|
4.
|
Servicer shall review the complete first lien loan modification application submitted by borrower and shall determine the disposition of borrower’s
|
5.
|
Servicer shall implement processes to ensure that second lien loan modification requests are evaluated on a timely basis. When a borrower qualifies for a second lien loan modification after a first lien loan modification in accordance with Section 2.c.i of the General Framework for Consumer Relief Provisions, the Servicer of the second lien loan shall (absent compelling circumstances beyond Servicer’s control) send loan modification documents to borrower no later than 45 days after the Servicer receives official notification of the successful completion of the related first lien loan modification and the essential terms.
|
6.
|
For all proprietary first lien loan modification programs, Servicer shall allow properly submitted borrower financials to be used for 90 days from the date the documents are received, unless Servicer learns that there has been a material change in circumstances or unless investor requirements mandate a shorter time frame.
|
7.
|
Servicer shall notify borrowers of the final denial of any first lien loan modification request within 10 business days of the denial decision. The notification shall be in the form of the non-approval notice required in paragraph IV.G.1 below.
|
G.
|
Independent Evaluation of First Lien Loan Modification Denials.
|
1.
|
Except when evaluated as provided in paragraphs IV.B.8 or IV.B.9, Servicer’s initial denial of an eligible borrower’s request for first lien loan modification following the submission of complete loan modification application shall be subject to an independent evaluation. Such evaluation shall be performed by an independent entity or a different employee who has not been involved with the particular loan modification.
|
2.
|
Denial Notice.
|
a.
|
When a first lien loan modification is denied after independent review, Servicer shall send a written non-approval notice to the borrower identifying the reasons for denial and the factual information considered. The notice shall inform the borrower that he or she has 30 days from the date of the denial letter declination to provide evidence that the eligibility determination was in error.
|
b.
|
If the first lien modification is denied because disallowed by investor, Servicer shall disclose in the written non-approval notice the name of the investor and summarize the reasons for investor denial.
|
c.
|
For those cases where a first lien loan modification denial is the result of an NPV calculation, Servicer shall provide in the written
|
3.
|
Appeal Process.
|
a.
|
After the automatic review in paragraph IV.G.1 has been completed and Servicer has issued the written non-approval notice, in the circumstances described in the first sentences
|
b.
|
For those cases in which the first lien loan modification denial is the result of an NPV calculation, if a borrower disagrees with the property value used by Servicer in the NPV test, the borrower can request that a full appraisal be conducted of the property by an independent licensed appraiser (at borrower expense) consistent with HAMP directive 10-15. Servicer shall comply with the process set forth in HAMP directive 10-15, including using such value in the NPV calculation.
|
c.
|
Servicer shall review the information submitted by borrower and use its best efforts to communicate the disposition of borrower’s appeal to borrower no later than 30 days after receipt of the information.
|
d.
|
If Servicer denies borrower’s appeal, Servicer’s appeal denial letter shall include a description of other available loss mitigation, including short sales and deeds in lieu of foreclosure.
|
H.
|
General Loss Mitigation Requirements.
|
1.
|
Servicer shall maintain adequate staffing and systems for tracking borrower documents and information that are relevant to foreclosure, loss mitigation, and other Servicer operations. Servicer shall make periodic assessments to ensure that its staffing and systems are adequate.
|
2.
|
Servicer shall maintain adequate staffing and caseload limits for SPOCs and employees responsible for handling foreclosure, loss mitigation and related communications with borrowers and housing counselors. Servicer shall make periodic assessments to ensure that its staffing and systems are adequate.
|
3.
|
Servicer shall establish reasonable minimum experience, educational and training requirements for loss mitigation staff.
|
4.
|
Servicer shall document electronically key actions taken on a foreclosure, loan modification, bankruptcy, or other servicing file, including communications with the borrower.
|
5.
|
Servicer shall not adopt compensation arrangements for its employees that encourage foreclosure over loss mitigation alternatives.
|
6.
|
Servicer shall not make inaccurate payment delinquency reports to credit reporting agencies when the borrower is making timely reduced payments pursuant to a trial or other loan modification agreement. Servicer shall provide the borrower, prior to entering into a trial loan modification, with clear and conspicuous written information that adverse credit reporting consequences may result from the borrower making reduced payments during the trial period.
|
7.
|
Where Servicer grants a loan modification, Servicer shall provide borrower with a copy of the fully executed loan modification agreement within 45 days of receipt of the executed copy from the borrower. If the modification is not in writing, Servicer shall provide the borrower with a written summary of its terms, as promptly as possible, within 45 days of the approval of the modification.
|
8.
|
Servicer shall not instruct, advise or recommend that borrowers go into default in order to qualify for loss mitigation relief.
|
9.
|
Servicer shall not discourage borrowers from working or communicating with legitimate non-profit housing counseling services.
|
10.
|
Servicer shall not, in the ordinary course, require a borrower to waive or release claims and defenses as a condition of approval for a loan modification program or other loss mitigation relief. However, nothing herein shall preclude Servicer from requiring a waiver or release of claims and defenses with respect to a loan modification offered in connection with the resolution of a contested claim, when the borrower would not otherwise be qualified for the loan modification under existing Servicer programs.
|
11.
|
Servicer shall not charge borrower an application fee in connection with a request for a loan modification. Servicer shall provide borrower with a pre-paid overnight envelope or pre-paid address label for return of a loan modification application.
|
12.
|
Notwithstanding any other provision of this Agreement, and to minimize the risk of borrowers submitting multiple loss mitigation requests for the purpose of delay, Servicer shall not be obligated to evaluate requests for loss mitigation options from (a) borrowers who have already been evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of HAMP or proprietary modification programs, or (b) borrowers who were evaluated after the date of implementation of this
|
I.
|
Proprietary First Lien Loan Modifications.
|
1.
|
Servicer shall make publicly available information on its qualification processes, all required documentation and information necessary for a complete first lien loan modification application, and key eligibility factors for all proprietary loan modifications.
|
2.
|
Servicer shall design proprietary first lien loan modification programs that are intended to produce sustainable modifications according to investor guidelines and previous results. Servicer shall design these programs with the intent of providing affordable payments for borrowers needing longer term or permanent assistance.
|
3.
|
Servicer shall track outcomes and maintain records regarding characteristics and performance of proprietary first lien loan modifications. Servicer shall provide a description of modification waterfalls, eligibility criteria, and modification terms, on a publicly- available website.
|
4.
|
Servicer shall not charge any application or processing fees for proprietary first lien loan modifications.
|
J.
|
Proprietary Second Lien Loan Modifications.
|
1.
|
Servicer shall make publicly available information on its qualification processes, all required documentation and information necessary for a complete second lien modification application.
|
2.
|
Servicer shall design second lien modification programs with the intent of providing affordable payments for borrowers needing longer term or permanent assistance.
|
3.
|
Servicer shall not charge any application or processing fees for second lien modifications.
|
4.
|
When an eligible borrower with a second lien submits all required information for a second lien loan modification and the modification request is denied, Servicer shall promptly send a written non-approval notice to the borrower.
|
K.
|
Short Sales.
|
1.
|
Servicer shall make publicly available information on general requirements for the short sale process.
|
2.
|
Servicer shall consider appropriate monetary incentives to underwater borrowers to facilitate short sale options.
|
3.
|
Servicer shall develop a cooperative short sale process which allows the borrower the opportunity to engage with Servicer to pursue a short sale evaluation prior to putting home on the market.
|
4.
|
Servicer shall send written confirmation of the borrower’s first request for
|
5.
|
Servicer shall send borrower at borrower’s address of record or to borrower’s agent timely written notice of any missing required documents for consideration of short sale within 30 days of receiving borrower’s request for a short sale.
|
6.
|
Servicer shall review the short sale request submitted by borrower and communicate the disposition of borrower’s request no later than 30 days after receipt of all required information and third-party consents.
|
7.
|
If the short sale request is accepted, Servicer shall contemporaneously notify the borrower whether Servicer or investor will demand a deficiency payment or related cash contribution and the approximate amount of that deficiency, if such deficiency obligation is permitted by applicable law. If the short sale request is denied, Servicer shall provide reasons for the denial in the written notice. If Servicer waives a deficiency claim, it shall not sell or transfer such claim to a third-party debt collector or debt buyer for collection.
|
L.
|
Loss Mitigation During Bankruptcy.
|
1.
|
Servicer may not deny any loss mitigation option to eligible borrowers on the basis that the borrower is a debtor in bankruptcy so long as borrower and any trustee cooperates in obtaining any appropriate approvals or consents.
|
2.
|
Servicer shall, to the extent reasonable, extend trial period loan modification plans as necessary to accommodate delays in obtaining bankruptcy court approvals or receiving full remittance of debtor’s trial period payments that have been made to a chapter 13 trustee. In the event of a trial period extension, the debtor must make a trial period payment for each month of the trial period, including any extension month.
|
3.
|
When the debtor is in compliance with a trial period or permanent loan modification plan, Servicer will not object to confirmation of the debtor’s chapter 13 plan, move to dismiss the pending bankruptcy case, or file a MRS solely on the basis that the debtor paid only the amounts due under the trial period or permanent loan modification plan, as opposed to the non-modified mortgage payments.
|
M.
|
Transfer of Servicing of Loans Pending for Permanent Loan Modification.
|
1.
|
Ordinary Transfer of Servicing from Servicer to Successor
|
a.
|
At time of transfer or sale, Servicer shall inform successor servicer (including a subservicer) whether a loan modification is pending.
|
b.
|
Any contract for the transfer or sale of servicing rights shall obligate the successor servicer to accept and continue processing pending loan modification requests.
|
c.
|
Any contract for the transfer or sale of servicing rights shall obligate the successor servicer to honor trial and permanent loan modification agreements entered into by prior servicer.
|
d.
|
Any contract for transfer or sale of servicing rights shall designate that borrowers are third party beneficiaries under paragraphs IV.M.1.b and IV.M.1.c, above.
|
2.
|
Transfer of Servicing to Servicer. When Servicer acquires servicing rights from another servicer, Servicer shall ensure that it will accept and continue to process pending loan modification requests from the prior servicer, and that it will honor trial and permanent loan modification agreements entered into by the prior servicer.
|
V.
|
PROTECTIONS FOR MILITARY PERSONNEL.
|
A.
|
Servicer shall comply with all applicable provisions of the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. Appx. § 501
et seq
., and any applicable state law offering protections to servicemembers.
|
B.
|
When a borrower states that he or she is or was within the preceding 9 months (or the then applicable statutory period under the SCRA) in active military service or has received and is subject to military orders requiring him or her to commence active military service, Lender shall determine whether the borrower may be eligible for the protections of the SCRA or for the protections of the provisions of paragraph V.F. If Servicer determines the borrower is so eligible, Servicer shall, until Servicer determines that such customer is no longer protected by the SCRA,
|
1.
|
if such borrower is not entitled to a SPOC, route such customers to employees who have been specially trained about the protections of the SCRA to respond to such borrower’s questions, or
|
2.
|
if such borrower is entitled to a SPOC, designate as a SPOC for such
|
C.
|
Servicer shall, in addition to any other reviews it may perform to assess eligibility under the SCRA, (i) before referring a loan for foreclosure, (ii) within seven days before a foreclosure sale, and (iii) the later of (A) promptly after a foreclosure sale and (B) within three days before the regularly scheduled end of any
|
D.
|
When a servicemember provides written notice requesting protection under the SCRA relating to interest rate relief, but does not provide the documentation required by Section 207(b)(1) of the SCRA (50 USC Appx. § 527(b)(1)), Servicer shall accept, in lieu of the documentation required by Section 207(b)(1) of the SCRA, a letter on official letterhead from the servicemember’s commanding officer including a contact telephone number for confirmation:
|
1.
|
Addressed in such a way as to signify that the commanding officer recognizes that the letter will be relied on by creditors of the servicemember (a statement that the letter is intended to be relied upon by the Servicemember’s creditors would satisfy this requirement);
|
2.
|
Setting forth the full name (including middle initial, if any), Social Security number and date of birth of the servicemember;
|
3.
|
Setting forth the home address of the servicemember; and
|
4.
|
Setting forth the date of the military orders marking the beginning of the period of military service of the servicemember and, as may be applicable, that the military service of the servicemember is continuing or the date on which the military service of the servicemember ended.
|
E.
|
Servicer shall notify customers who are 45 days delinquent that, if they are a servicemember, (a) they may be entitled to certain protections under the SCRA regarding the servicemember’s interest rate and the risk of foreclosure, and (b) counseling for covered servicemembers is available at agencies such as Military OneSource, Armed Forces Legal Assistance, and a HUD-certified housing counselor. Such notice shall include a toll-free number that servicemembers may call to be connected to a person who has been specially trained about the protections of the SCRA to respond to such borrower’s questions. Such telephone number shall either connect directly to such a person or afford a caller the ability to identify him- or herself as an eligible servicemember and be routed to such persons. Servicers hereby confirm that they intend to take reasonable steps to ensure the dissemination of such toll-free number to customers who may be
|
F.
|
Irrespective of whether a mortgage obligation was originated before or during the period of a servicemember’s military service, if, based on the determination described in the last sentence and subject to Applicable Requirements, a servicemember’s military orders (or any letter complying with paragraph V.D), together with any other documentation satisfactory to the Servicer, reflects that the servicemember is (a) eligible for Hostile Fire/Imminent Danger Pay and (b) serving at a location (i) more than 750 miles from the location of the secured property or (ii) outside of the United States, then to the extent consistent with Applicable Requirements, the Servicer shall not sell, foreclose, or seize a property for a breach of an obligation on real property owned by a servicemember that is
|
G.
|
Servicer shall not require a servicemember to be delinquent to qualify for a short sale, loan modification, or other loss mitigation relief if the servicemember is suffering financial hardship and is otherwise eligible for such loss mitigation. Subject to Applicable Requirements, for purposes of assessing financial hardship in relation to (i) a short sale or deed in lieu transaction, Servicer will take into account whether the servicemember is, as a result of a permanent change of station order, required to relocate even if such servicemember’s income has not been decreased, so long as the servicemember does not have sufficient liquid assets to make his or her monthly mortgage payments, or (ii) a loan modification, Servicer will take into account whether the servicemember is, as a result of his or her under military orders required to relocate to a new duty station at least seventy five mile from his or her residence/secured property or to reside at a location other than the residence/secured property, and accordingly is unable personally to occupy the residence and (a) the residence will continue to be occupied by his or her dependents, or (b) the residence is the only residential property owned by the servicemember.
|
H.
|
Servicer shall not make inaccurate reports to credit reporting agencies when a servicemember, who has not defaulted before relocating under military orders to a new duty station, obtains a short sale, loan modification, or other loss mitigation relief.
|
VI.
|
RESTRICTIONS ON SERVICING FEES.
|
A.
|
General Requirements.
|
1.
|
All default, foreclosure and bankruptcy-related service fees, including third-party fees, collected from the borrower by Servicer shall be bona fide, reasonable in amount, and disclosed in detail to the borrower as provided in paragraphs I.B.10 and VI.B.1.
|
B.
|
Specific Fee Provisions.
|
1.
|
Schedule of Fees. Servicer shall maintain and keep current a schedule of common non-state specific fees or ranges of fees that may be charged to borrowers by or on behalf of Servicer. Servicer
|
2.
|
Servicer may collect a default-related fee only if the fee is for reasonable and appropriate services actually rendered and one of the following conditions is met:
|
a.
|
the fee is expressly or generally authorized by the loan instruments and not prohibited by law or this Agreement;
|
b.
|
the fee is permitted by law and not prohibited by the loan instruments or this Agreement; or
|
c.
|
the fee is not prohibited by law, this Agreement or the loan instruments and is a reasonable fee for a specific service requested by the borrower that is collected only after clear and conspicuous disclosure of the fee is made available to the borrower.
|
3.
|
Attorneys’ Fees. In addition to the limitations in paragraph VI.B.2 above, attorneys’ fees charged in connection with a foreclosure action or bankruptcy proceeding shall only be for work actually performed and shall not exceed reasonable and customary fees for such work. In the event a foreclosure action is terminated prior to the final judgment and/or sale for a loss mitigation option, a reinstatement, or payment in full, the borrower shall be liable only for reasonable and customary fees for work actually performed.
|
4.
|
Late Fees.
|
a.
|
Servicer shall not collect any late fee or delinquency charge when the only delinquency is attributable to late fees or delinquency charges assessed on an earlier payment, and the payment is otherwise a full payment for the applicable period and is paid on or before its due date or within any applicable grace period.
|
b.
|
Servicer shall not collect late fees (i) based on an amount greater than the past due amount; (ii) collected from the escrow account or from escrow surplus without the approval of the borrower; or (iii) deducted from any regular payment.
|
c.
|
Servicer shall not collect any late fees for periods during which
|
C.
|
Third-Party Fees.
|
1.
|
Servicer shall not impose unnecessary or duplicative property inspection, property preservation or valuation fees on the borrower, including, but not limited to, the following:
|
a.
|
No property preservation fees shall be imposed on eligible borrowers who have a pending application with Servicer for loss mitigation relief or are performing under a loss mitigation program, unless Servicer has a reasonable basis to believe that property preservation is necessary for the maintenance of the property, such as when the property is vacant or listed on a violation notice from a local jurisdiction;
|
b.
|
No property inspection fee shall be imposed on a borrower any more frequently than the timeframes allowed under GSE or HUD guidelines unless Servicer has identified specific circumstances supporting the need for further property inspections; and
|
c.
|
Servicer shall be limited to imposing property valuation fees (
e.g.
, BPO) to once every 12 months, unless other valuations are requested by the borrower to facilitate a short sale or to support a loan modification as outlined in paragraph IV.G.3.a, or required as part of the default or foreclosure valuation process.
|
2.
|
Default, foreclosure and bankruptcy-related services performed by third parties shall be at reasonable market value.
|
3.
|
Servicer shall not collect any fee for default, foreclosure or bankruptcy- related services by an affiliate unless the amount of the fee does not exceed the lesser of (a) any fee limitation or allowable amount for the service under applicable state law, and (b) the market rate for the service. To determine the market rate, Servicer shall obtain annual market reviews of its affiliates’ pricing for such default and foreclosure-related services; such market reviews shall be performed by a qualified, objective, independent third-party professional using procedures and standards generally accepted in the industry to yield accurate and reliable results. The independent third-party professional shall determine in its market survey the price actually charged by third-party affiliates and by independent third party vendors.
|
4.
|
Servicer shall be prohibited from collecting any unearned fee, or giving or accepting referral fees in relation to third-party default or foreclosure- related services.
|
5.
|
Servicer shall not impose its own mark-ups on Servicer initiated third-party default or foreclosure-related services.
|
D.
|
Certain Bankruptcy Related Fees.
|
1.
|
Servicer must not collect any attorney’s fees or other charges with respect to the preparation or submission of a POC or MRS document that is withdrawn or denied, or any amendment thereto that is required, as a result of a substantial misstatement by Servicer of the amount due.
|
2.
|
Servicer shall not collect late fees due to delays in receiving full remittance of debtor’s payments, including trial period or permanent modification payments as well as post-petition conduit payments in accordance with 11 U.S.C. § 1322(b)(5), that debtor has timely (as defined by the underlying Chapter 13 plan) made to a chapter 13 trustee.
|
VII.
|
FORCE-PLACED INSURANCE
.
|
A.
|
General Requirements for Force-Placed Insurance.
|
1.
|
Servicer shall not obtain force-placed insurance unless there is a reasonable basis to believe the borrower has failed to comply with the loan contract’s requirements to maintain property insurance. For escrowed accounts, Servicer shall continue to advance payments for the homeowner’s existing policy, unless the borrower or insurance company cancels the existing policy. For purposes of this section VII, the term “force-placed insurance” means hazard insurance coverage obtained by Servicer when the borrower has failed to maintain or renew hazard or wind insurance on such property as required of the borrower under the terms of the mortgage.
|
2.
|
Servicer shall not be construed as having a reasonable basis for obtaining force-placed insurance unless the requirements of this section VII have been met.
|
3.
|
Servicer shall not impose any charge on any borrower for force-placed insurance with respect to any property securing a federally related mortgage unless:
|
a.
|
Servicer has sent, by first-class mail, a written notice to the borrower containing:
|
i.
|
A reminder of the borrower’s obligation to maintain hazard insurance on the property securing the federally related mortgage;
|
ii.
|
A statement that Servicer does not have evidence of insurance coverage of such property;
|
iii.
|
A clear and conspicuous statement of the procedures by which the borrower may demonstrate that the borrower already has insurance coverage;
|
iv.
|
A statement that Servicer may obtain such coverage at
|
v.
|
A statement that the cost of such coverage may be
|
vi.
|
For first lien loans on Servicer’s primary servicing system, a statement that, if the borrower desires to maintain his or her voluntary policy, Servicer will offer an escrow account and advance the premium due on the voluntary policy if the borrower: (a) accepts the offer of the escrow account; (b) provides a copy of the invoice from the voluntary carrier; agrees in writing to reimburse the escrow advances through regular escrow payments; (d) agrees to escrow to both repay the advanced premium and to pay for the future premiums necessary to maintain any required insurance policy; and (e) agrees Servicer shall manage the escrow account in accordance with the loan documents and with state and federal law; and
|
vii.
|
A statement, in the case of single interest coverage, that the coverage may only protect the mortgage holder’s interest and not the homeowner’s interest.
|
b.
|
Servicer has sent, by first-class mail, a second written notice, at least 30 days after the mailing of the notice under paragraph
|
c.
|
Servicer has not received from the borrower written confirmation of hazard insurance coverage for the property securing the mortgage by the end of the 15-day period beginning on the date the notice under paragraph VII.A.3.b was sent by Servicer.
|
4.
|
Servicer shall accept any reasonable form of written confirmation from a borrower or the borrower’s insurance agent of existing insurance coverage, which shall include the existing insurance policy number along with the identity of, and contact information for, the insurance company or agent.
|
5.
|
Servicer shall not place hazard or wind insurance on a mortgaged property, or require a borrower to obtain or maintain such insurance, in excess of the greater of replacement value, last-known amount of coverage or the outstanding loan balance, unless required by Applicable Requirements, or requested by borrower in writing.
|
6.
|
Within 15 days of the receipt by Servicer of evidence of a borrower’s existing insurance coverage, Servicer shall:
|
a.
|
Terminate the force-placed insurance; and
|
b.
|
Refund to the consumer all force-placed insurance premiums paid by the borrower during any period during which the borrower’s insurance coverage and the force placed insurance coverage were each in effect, and any related fees charged to the consumer’s account with respect to the force-placed insurance during such period.
|
7.
|
Servicer shall make reasonable efforts to work with the borrower to
|
8.
|
Any force-placed insurance policy must be purchased for a commercially reasonable price.
|
9.
|
No provision of this section VII shall be construed as prohibiting Servicer from providing simultaneous or concurrent notice of a lack of flood insurance pursuant to section 102(e) of the Flood Disaster Protection Act of 1973.
|
VIII.
|
GENERAL SERVICER DUTIES AND PROHIBITIONS.
|
A.
|
Measures to Deter Community Blight.
|
1.
|
Servicer shall develop and implement policies and procedures to ensure that REO properties do not become blighted.
|
2.
|
Servicer shall develop and implement policies and procedures to enhance participation and coordination with state and local land bank programs, neighborhood stabilization programs, nonprofit redevelopment programs, and other anti-blight programs, including those that facilitate discount sale or donation of low-value REO properties so that they can be demolished or salvaged for productive use.
|
3.
|
As indicated in I.A.18, Servicer shall (a) inform borrower that if the borrower continues to occupy the property, he or she has responsibility to maintain the property, and an obligation to continue to pay taxes owed, until a sale or other title transfer action occurs; and (b) request that if the borrower wishes to abandon the property, he or she contact Servicer to discuss alternatives to foreclosure under which borrower can surrender the property to Servicer in exchange for compensation.
|
4.
|
When the Servicer makes a determination not to pursue foreclosure action on a property with respect to a first lien mortgage loan, Servicer shall:
|
a.
|
Notify the borrower of Servicer’s decision to release the lien
|
b.
|
Notify local authorities, such as tax authorities, courts, or code enforcement departments, when Servicer decides to release the lien and not pursue foreclosure.
|
B.
|
Tenants’ Rights.
|
1.
|
Servicer shall comply with all applicable state and federal laws governing the rights of tenants living in foreclosed residential properties.
|
2.
|
Servicer shall develop and implement written policies and procedures to ensure compliance with such laws.
|
IX.
|
GENERAL PROVISIONS, DEFINITIONS, AND IMPLEMENTATION.
|
A.
|
Applicable Requirements.
|
1.
|
The servicing standards and any modifications or other actions taken in accordance with the servicing standards are expressly subject to, and shall be interpreted in accordance with, (a) applicable federal, state and local laws, rules and regulations, including, but not limited to, any requirements of the federal banking regulators, (b) the terms of the applicable mortgage loan documents, (c) Section 201 of the Helping Families Save Their Homes Act of 2009, and (d) the terms and provisions of the Servicer Participation Agreement with the Department of Treasury, any servicing agreement, subservicing agreement under which Servicer services for others, special servicing agreement, mortgage or bond insurance policy or related agreement or requirements to which Servicer is a party and by which it or its servicing is bound pertaining to the servicing or ownership of the mortgage loans, including without limitation the requirements, binding directions, or investor guidelines of the applicable investor (such as Fannie Mae or Freddie Mac), mortgage or bond insurer, or credit enhancer (collectively, the “Applicable Requirements”).
|
2.
|
In the event of a conflict between the requirements of the Agreement and the Applicable Requirements with respect to any provision of this Agreement such that the Servicer cannot comply without violating Applicable Requirements or being subject to adverse action, including fines and penalties, Servicer shall document such conflicts and notify the Monitor and the Monitoring Committee that it intends to comply with the Applicable Requirements to the extent necessary to eliminate the conflict. Any associated Metric provided for in the Enforcement Terms will be adjusted accordingly.
|
B.
|
Definitions.
|
1.
|
In each instance in this Agreement in which Servicer is required to ensure adherence to, or undertake to perform certain obligations, it is intended to mean that Servicer shall: (a) authorize and adopt such
|
2.
|
References to Servicer shall mean SunTrust Mortgage, Inc. and shall include Servicer’s successors and assignees in the event of a sale of all or substantially all of the assets of Servicer or of Servicer’s division(s) or major business unit(s) that are engaged as a primary business in customer- facing servicing of residential mortgages on owner-occupied properties. The provisions of this Agreement shall not apply to those divisions or major business units of Servicer that are not engaged as a primary business in customer-facing servicing of residential mortgages on owner-occupied one-to-four family properties on its own behalf or on behalf of investors.
|
1.
|
First Lien Mortgage Modifications
|
a.
|
Servicer will receive credit under Table 1, Section 1, for first-lien
|
b.
|
First liens on occupied1 Properties with an unpaid principal balance (“UPB”) prior to capitalization at or below the highest GSE conforming loan limit cap as of January 1, 2010 shall constitute at least 85% of the eligible credits for first liens (the “Applicable Limits”).
|
c.
|
Eligible borrowers must be at least 30 days delinquent or otherwise qualify as being at imminent risk of default due to borrower’s financial situation.
|
d.
|
Eligible borrowers’ pre-modification loan-to-value ratio (“LTV”) is greater than 100%.
|
e.
|
Post-modification payment should target a debt-to-income ratio (“DTI”)2 of 31% (or an affordability measurement consistent with HAMP guidelines) and a modified LTV3 of no greater than 120%, provided that eligible borrowers receive a modification that meets the following terms:
|
i.
|
Payment of principal and interest must be reduced by at least 10%.
|
ii.
|
Where LTV exceeds 120% at a DTI of 31%, principal shall be reduced to a LTV of 120%, subject to a minimum DTI of 25% (which minimum may be waived by Servicer at Servicer’s sole
|
1
|
Servicer may rely on a borrower’s statement, at the time of the modification evaluation, that a Property is occupied or that the borrower intends to rent or re- occupy the property.
|
2
|
Consistent with HAMP, DTI is based on first-lien mortgage debt only. For non- owner-occupied properties, Servicer shall consider other appropriate measures of affordability.
|
3
|
For the purposes of these guidelines, LTV may be determined in accordance with HAMP PRA.
|
f.
|
DTI requirements may be waived for first lien mortgages that are 180 days or more delinquent as long as payment of principal and interest is reduced by at least 20% and LTV is reduced to at least 120%.
|
g.
|
Servicer shall also be entitled to credit for any amounts of principal reduction which lower LTV below 120%.
|
h.
|
When Servicer reduces principal on a first lien mortgage via its proprietary modification process, and a Participating Servicer owns the second lien mortgage, the second lien shall be modified by the second lien owning Participating Servicer in accordance with Section 2.c.i below, provided that any Participating Servicer other than the five largest servicers shall be given a reasonable amount of time, as determined by the Monitor, after that Participating Servicer’s Start Date to make system changes necessary to participate in and implement this requirement.
|
i.
|
In the event that, in the first 6 months after Servicer’s Start Date (as defined below), Servicer temporarily provides forbearance or conditional forgiveness to an eligible borrower as the Servicer ramps up use of principal reduction, Servicer shall receive credit for principal reduction on such modifications provided that (i) Servicer may not receive credit for both the forbearance and the subsequent principal reduction and (ii) Servicer will only receive the credit for the principal reduction once the principal is actually forgiven in accordance with these Consumer Relief Requirements and Table 1.
|
j.
|
Eligible modifications include any modification that is made on or after Servicer’s Start Date, including:
|
i.
|
Write-offs made to allow for refinancing under the FHA Short Refinance Program;
|
ii.
|
Modifications under the Making Home Affordable Program (including the Home Affordable Modification Program (“HAMP”) Tier 1 or Tier 2) or the Housing Finance Agency Hardest Hit Fund (“HFA Hardest Hit Fund”) (or any other federal program) where principal is forgiven, except to the extent that state or federal funds paid to Servicer in its capacity as an investor are the source of a Servicer’s credit claim.
|
iii.
|
Modifications under other proprietary or other government modification programs, provided that such modifications meet the guidelines set forth herein.4
|
2.
|
Second Lien Portfolio Modifications
|
a.
|
Servicer is required to adhere to these guidelines in order to receive credit under Table 1, Section 2.
|
b.
|
A write-down of a second lien mortgage will be creditable where such write-down facilitates either (a) a first lien modification that involves an occupied Property for which the borrower is 30 days delinquent or otherwise at imminent risk of default due to the borrower’s financial situation; or (b) a second lien modification that involves an occupied Property with a second lien which is at least 30 days delinquent or otherwise at imminent risk of default due to the borrower’s financial situation.
|
4
|
Two examples are hereby provided. Example 1: on a mortgage loan at 175% LTV, when a Servicer (in its capacity as an investor) extinguishes $75 of principal through the HAMP Principal Reduction Alternative (“PRA”) modification in order to bring the LTV down to 100%, if the Servicer receives $28.10 in PRA principal reduction incentive payments from the U.S. Department of the Treasury for that extinguishment, then the Servicer may claim $46.90 of principal reduction for credit under these Consumer Relief Requirements:
|
c.
|
Required Second Lien Modifications:
|
i.
|
Servicer agrees that it must write down second liens consistent with the following program until its Consumer Relief Requirement credits are fulfilled:
|
1.
|
A write-down of a second lien mortgage will be creditable where a successful first lien modification is completed by a Participating Servicer via a servicer’s proprietary, non- HAMP modification process, in accordance with Section 1, with the first lien modification meeting the following criteria:
|
a.
|
Minimum 10% payment reduction (principal and interest);
|
b.
|
Income verified;
|
c.
|
A UPB at or below the Applicable Limits; and
|
d.
|
Post-modification DTI5 between 25% and 31%.
|
2.
|
If a Participating Servicer has completed a successful proprietary first lien modification and the second lien loan amount is greater than $5,000 UPB and the current monthly payment is greater than $100, then:
|
a.
|
Servicer shall extinguish and receive credit in accordance with Table 1, Section 2.iii on any second lien that is greater than 180 days delinquent.
|
b.
|
Otherwise, Servicer shall solve for a second lien payment utilizing the HAMP Second Lien Modification Program (“2MP”) logic used as of January 26, 2012.
|
c.
|
Servicer shall use the following payment waterfall:
|
i.
|
Forgiveness equal to the lesser of (a) achieving 115% combined loan-to-value ratio (“CLTV”) or (b) 30% UPB (subject to minimum forgiveness level); then
|
ii.
|
Reduce rate until the 2MP payment required by 2MP logic as of January 26, 2012; then
|
5
|
Consistent with HAMP, DTI is based on first-lien mortgage debt only. For non- owner-occupied properties, Servicer shall consider other appropriate measures of affordability.
|
iii.
|
Extend term to “2MP Term” (greater of modified first or remaining second).
|
d.
|
Servicer shall maintain an I/O product option consistent with 2MP protocols.
|
d.
|
Eligible second lien modifications include any modification that is made on or after Servicer’s Start Date, including:
|
i.
|
Principal reduction or extinguishments through the Making Home Affordable Program (including 2MP), the FHA Short Refinance Second Lien (“FHA2LP”) Program or the HFA Hardest Hit Fund (or any other federal program), except (to the extent) that state or federal funds are the source of a Servicer’s credit claim.
|
ii.
|
Second lien write-downs or extinguishments completed under proprietary modification programs, are eligible, provided that such write-downs or extinguishments meet the guidelines as set forth herein.
|
e.
|
Extinguishing balances of second liens to support the future ability of individuals to become homeowners will be credited based on applicable credits in Table 1.
|
3.
|
Enhanced Borrower Transitional Funds
|
4.
|
Short Sales
|
a.
|
As described in the preceding paragraph, Servicer may receive credit for providing incentive payments for borrowers on or after Servicer’s Start Date who are eligible and amenable to accepting such payments in return for a dignified exit from a Property via short sale or similar program. Credit shall be provided in accordance with Table 1, Section 3.i.
|
b.
|
To facilitate such short sales, Servicer may receive credit for extinguishing second liens on or after Servicer’s Start Date under Table 1, Section 4.
|
c.
|
Short sales through the Home Affordable Foreclosure Alternatives (HAFA) Program or any HFA Hardest Hit Fund program or proprietary programs closed on or after Servicer’s Start Date are eligible.
|
d.
|
Servicer shall be required to extinguish a second lien owned by Servicer behind a successful short sale/deed-in-lieu conducted by a Participating Servicer (provided that any Participating Servicer other than the five largest servicers shall be given a reasonable amount of time, as determined by the Monitor, after their Start Date to make system changes necessary to participate in and implement this requirement) where the first lien is greater than 100% LTV and has a UPB at or below the Applicable Limits, until Servicer’s Consumer Relief Requirement credits are fulfilled. The first lien holder would pay to the second lien holder 8% of UPB, subject to a $2,000 floor and an $8,500 ceiling. The second lien holder would then release the note or lien and waive the balance.
|
5.
|
Deficiency Waivers
|
a.
|
Servicer may receive credit for waiving deficiency balances if not eligible for credit under some other provision, subject to the cap provided in the Table 1, Section 5.i.
|
b.
|
Credit for such waivers of any deficiency is only available where Servicer has a valid deficiency claim, meaning where Servicer can evidence to the Monitor that it had the ability to pursue a deficiency against the borrower but waived its right to do so after completion of the foreclosure sale.
|
6.
|
Forbearance for Unemployed Borrowers
|
a.
|
Servicer may receive credit for forgiveness of payment of arrearages on behalf of an unemployed borrower in accordance with Table 1, Section 6.i.
|
b.
|
Servicer may receive credit under Table 1, Section 6.ii., for funds expended to finance principal forbearance solutions for unemployed borrowers as a means of keeping them in their homes until such time as the borrower can resume payments. Credit will only be provided beginning in the 7th month of the forbearance under Table 1, Section 6.ii.
|
7.
|
Anti-Blight Provisions
|
a.
|
Servicer may receive credit for certain anti-blight activities in accordance with and subject to caps contained in Table 1, Section 7.
|
b.
|
Any Property value used to calculate credits for this provision shall have a property evaluation meeting the standards acceptable under the Making Home Affordable programs received within 3 months of the transaction.
|
8.
|
Benefits for Servicemembers
|
a.
|
Short Sales
|
i.
|
Servicer shall, with respect to owned portfolio first liens, provide servicemembers who qualify for SCRA benefits (“Eligible
|
ii.
|
Eligible Servicemembers shall be eligible for this short sale program if: (a) they are an active duty full-time status Eligible Servicemember; (b) the property securing the mortgage is not vacant or condemned; (c) the property securing the mortgage is the Eligible Servicemember’s primary residence (or, the property was his or her principal residence immediately before he or she moved pursuant to a Permanent Change of Station (“PCS”) order dated on or after October 1, 2010; (d) the Eligible Servicemember
|
b.
|
Short Sale Waivers
|
i.
|
If an Eligible Servicemember qualifies for a short sale hereunder and sells his or her principal residence in a short sale conducted in accordance with Servicer’s then customary short sale process,
|
ii.
|
Servicer shall receive credit under Table 1, Section 4, for mandatory waivers of amounts under this Section 8.b.
|
c.
|
With respect to the refinancing program described in Section 9 below, Servicer shall use reasonable efforts to identify active servicemembers in its owned portfolio who would qualify and to solicit those individuals for the refinancing program.
|
9.
|
Refinancing Program
|
a.
|
Servicer shall create a refinancing program for current borrowers.
|
i.
|
The program shall apply only to Servicer-owned first lien mortgage loans.
|
ii.
|
Loan must be current with no delinquencies in past 12 months.
|
iii.
|
Fixed rate loans, ARMS, or I/Os are eligible if they have an initial period of 5 years or more.
|
iv.
|
Current LTV is greater than 100%.
|
v.
|
Loans must have been originated prior to January 1, 2009.
|
vi.
|
Loan must not have received any modification in the past 24 months.
|
vii.
|
Loan must have a current interest rate of at least 5.25 % or PMMS
|
viii.
|
The minimum difference between the current interest rate and the offered interest rate under this program must be at least 25 basis points or there must be at least a $100 reduction in monthly payment.
|
ix.
|
Maximum UPB will be an amount at or below the Applicable Limits.
|
x.
|
The following types of loans are excluded from the program eligibility:
|
1.
|
FHA/VA
|
2.
|
Property outside the 50 States, DC, and Puerto Rico
|
3.
|
Loans on Manufactured Homes
|
4.
|
Loans for borrowers who have been in bankruptcy anytime
|
5.
|
Loans that have been in foreclosure within the prior 24 months
|
b.
|
The refinancing program shall be made available to all borrowers fitting the minimum eligibility criteria described above in 9.a. Servicer will be free to extend the program to other customers beyond the minimum eligibility criteria provided above and will receive credit under this Agreement for such refinancings, provided that such customers have an LTV of over 80%, and would not have qualified for a refinance under Servicer’s generally-available refinance programs as of September 30, 2011. Notwithstanding the foregoing, Servicer shall not be required to solicit or refinance borrowers who do not satisfy the eligibility criteria under 9.a above. In addition, Servicer shall not be required to refinance a loan under circumstances that, in the reasonable judgment of the Servicer, would result in Troubled Debt Restructuring (“TDR”) treatment. A letter to the United States Securities and Exchange Commission regarding TDR treatment, dated November 22, 2011, shall be provided to the Monitor for review.
|
c.
|
The structure of the refinanced loans shall be as follows:
|
i.
|
Servicer may offer refinanced loans with reduced rates either:
|
1.
|
For the life of the loan;
|
2.
|
For loans with current interest rates above 5.25% or PMMS
|
3.
|
For loans with an interest rate below 5.25% or PMMS + 100 basis points, whichever is greater, the interest rate may be reduced to obtain at least a 25 basis point interest rate reduction or $100 payment reduction in monthly payment, for a period of 5 years, followed by 0.5% annual interest rate increases with a maximum ending interest rate of 5.25% or PMMS + 100 basis points.
|
ii.
|
The original term of the loan may be changed.
|
iii.
|
Rate reduction could be done through a modification of the existing loan terms or refinance into a new loan.
|
iv.
|
New term of the loan has to be a fully amortizing product.
|
v.
|
The new interest rate will be capped at 100 basis points over the
|
d.
|
Banks fees and expenses shall not exceed the amount of fees charged by Banks under the current Home Affordable Refinance Program (“HARP”) guidelines.
|
e.
|
The program shall be credited under these Consumer Relief Requirements as follows:
|
i.
|
Credit will be calculated as the difference between the preexisting interest rate and the offered interest rate times UPB times a multiplier.
|
ii.
|
The multiplier shall be as follows:
|
1.
|
If the new rate applies for the life of the loan, the multiplier shall be 8 for loans with a remaining term greater than 15 years, 6 for loans with a remaining term between 10 and 15 years and 5 for loans with a remaining term less than 10 years.
|
2.
|
If the new rate applies for 5 years, the multiplier shall be 5.
|
f.
|
Additional dollars spent by each Servicer on the refinancing program beyond that Servicer’s required commitment shall be credited 25% against that Servicer’s first lien principal reduction obligation and 75% against that Servicer’s second lien principal reduction obligation, up to the limits set forth in Table 1.
|
10.
|
Timing, Incentives, and Payments
|
a.
|
For the consumer relief and refinancing activities imposed by this Agreement, Servicer shall be entitled to receive credit against Servicer’s outstanding settlement commitments for activities taken on or after Servicer’s start date, March 1, 2012 (such date, the “Start Date”).
|
b.
|
Servicer shall receive an additional 25% credit against Servicer’s outstanding settlement commitments for any first or second lien principal reduction and any amounts credited pursuant to the refinancing program within 12 months of Servicer’s Start Date (e.g., a $1.00 credit for Servicer activity would count as $1.25).
|
c.
|
Servicer shall complete 75% of its Consumer Relief Requirement credits within two years of the Servicer’s Start Date.
|
d.
|
If Servicer fails to meet the commitment set forth in these Consumer Relief Requirements within three years of Servicer’s Start Date, Servicer
|
11.
|
Applicable Requirements
|
Menu Item
|
|
Credit Towards Settlement
|
Credit Cap
|
Consumer Relief Funds
|
|
|
|
|
|
|
|
First Lien Mortgage Modification
2
|
|
|
Minimum 30%
for First Lien
Mods
3
(which can be reduced by 2.5% of overall consumer relief funds for excess refinancing program credits above the minimum amount required)
|
PORTFOLIO LOANS
|
|
|
|
i.
First lien principal forgiveness modification
|
|
LTV </= 175%;
$1.00 Write-down = $1.00 Credit
LTV > 175%;
$1.00 Write-down = $.50 Credit (for only the portion of principal forgiven over 175%)
|
|
ii.
Forgiveness of forbearance amounts on existing modifications
|
|
$1.00 Write-down = $0.40
Credit modifications
|
Max 12.5
|
iii.
Earned forgiveness over a
period of no greater than 3
years - provided
consistent with PRA
|
|
LTV </= 175%: $1.00 Write-down = $.85 Credit
LTV > 175%: $1.00 Write-down = $0.45 Credit (for only the portion of principal forgiven over 175%)
|
|
|
|
|
|
SERVICEFOROTHERS
|
|
|
|
iv.
First lien principal forgiveness modification on investor loans (forgiveness by investor)
|
|
$1.00 Write-own = $0.45 Credit
|
|
|
|
|
|
v.
Earned forgiveness over a period of no greater than 3 years - provided consistent with PRA
|
|
LTV </= 175%: $1.00 Write-down = $.40 Credit
LTV > 175%: $1.00 Write-down = $0.20 Credit (for only the portion of principal forgiven over 175%)
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|
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Menu Item
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|
Credit Towards Settlement
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Credit Cap
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Second Lien Portfolio Modifications
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|
|
Minimum of 60% for 1st and 2nd Lien Mods (which can be reduced by 10% of overall consumer relief funds for excess refinancing program credits above the minimum amounts required)
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i.
Performing Second Liens (0-90 days delinquent)
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|
$1.00 Write-down = $0.90 Credit
|
|
ii.
Seriously Delinquent Second Liens (>90-179 days delinquent)
|
|
$1.00 Write-down = $0.50 Credit
|
|
iii.
Non-Performing Second Liens (180 or more days delinquent)
|
|
$1.00 Write-down = $0.10 Credit
|
|
Enhanced Borrower Transitional Funds
|
|
|
Max 5%
|
i.
Servicer Makes Payment
|
|
$1.00 Payment = $1.00 Credit (for the amount over $1,500)
|
|
ii.
Investor Makes Payment (non-GSE)
|
|
$1.00 Payment = 0.45 Credit (for the amount over the $1,500 average payment established by Fannie Mae and Freddie Mac)
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|
4. Short Sales/Deeds in Lieu
|
|
|
|
i.
Servicer makes payment to unrelated 2nd lien holder for release of 2nd lien
|
|
$1.00 Payment = $1.00 Credit
|
|
ii.
Servicer forgives deficiency and releases lien on 1st lien Portfolio Loans
|
|
$1.00 Write-down = $0.45 Credit
|
|
iii.
Investor forgives deficiency and releases lien on 1st Lien investor loans
|
|
$1.00 Write-down = 0.20 Credit
|
|
iv.
Forgiveness of deficiency balance and release of lien on Portfolio Second Liens Performing Second Liens (0-90 days delinquent)
|
|
$1.00 Write-down = $0.90 Credit
|
|
Seriously Delinquent Second Liens (>90-179 days delinquent)
|
|
$1.00 Write-down = $0.50 Credit
|
|
Non-Performing Second Liens (180 or more days delinquent)
|
|
$1.00 Write-down = $0.10 Credit
|
|
5. Deficiency Waivers
|
|
|
Max 10%
|
i.
Deficiency waived on 1st and 2nd liens loans
|
|
$1.00 Write-down = $0.10 Credit
|
|
|
|
|
|
Menu Item
|
|
Credit Towards Settlement
|
Credit Cap
|
6. Forbearance for unemployment of homeowners
|
|
|
|
i.
Servicer forgives payment arrearages on behalf of borrower
|
|
$1.00 new forgiveness = $1.00 Credit
|
|
ii.
Servicer facilitates traditional forbearance program
|
|
$1.00 new forbearance = $0.05 Credit
|
|
7. Anti-Blight Provisions
|
|
|
Max 12%
|
i.
Forgiveness of principal associated with a property where Servicer does not pursue foreclosure
|
|
$1.00 property value = $0.50 Credit
|
|
ii.
Cash costs paid by Servicer for demolition of property
|
|
$1.00 payment = $1.00 Credit
|
|
iii.
REO properties donated to accepting municipalities or non- profits or to disabled servicemembers or relatives of deceased servicemembers
|
|
$1.00 property value = $1.00 Credit
|
|
A.
|
Implementation Timeline.
Servicer anticipates that it will phase in the implementation of the Servicing Standards using a grid approach that prioritizes implementation based upon: (i) the importance of the Servicing Standard to the borrower; and (ii) the difficulty of implementing the Servicing Standard. In addition to the Servicing Standards that have been implemented upon entry of this Consent Judgment, the periods for implementation will be: (a) within 60 days of entry of this Consent Judgment; (b) within 90 days of entry of this Consent Judgment; and (c) within 180 days of entry of this Consent Judgment. Servicer will agree with the Monitor chosen pursuant to Section C, below, on the timetable in which the Servicing Standards will be implemented. In the event that Servicer, using reasonable efforts, is unable to implement certain of the standards on the specified timetable, Servicer may apply to the Monitor for a reasonable extension of time to implement those standards or requirements.
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B.
|
Monitoring Committee.
The Monitoring Committee established pursuant to certain Consent Judgments entered in
United States, et al. v. Bank of America Corp., et al.
, No. 12-civ-00361-RMC (April 4, 2012) (Docket Nos. 10-14) and referenced specifically in paragraph 8 of those Consent Judgments, shall monitor Servicer’s compliance with this Consent Judgment (the “Monitoring Committee”). References to the “Monitoring Committee” in this Exhibit and related documents shall be understood to refer to the same Monitoring Committee as that established in the
Bank of America Corp.
case referenced in the preceding sentence with the addition of a CFPB member, and the Monitoring Committee shall serve as the representative of the participating state and federal agencies in the administration of all aspects of this and all similar Consent Judgments and the monitoring of compliance with it by the Defendant. The Monitoring Committee may substitute representation, as necessary. Subject to Section F, the Monitoring Committee may share all Monitor Reports, as that term is defined in Section D.3 below, with any releasing party.
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C.
|
Monitor
|
1.
|
Pursuant to an agreement of the parties, Joseph A. Smith Jr. is appointed to the position of Monitor under this Consent Judgment. If the Monitor is at any time unable to complete his or her duties under this Consent Judgment, Servicer and the Monitoring Committee shall mutually agree upon a replacement in accordance with the processes and standards set forth in Section C of Exhibit E.
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2.
|
Such Monitor shall be highly competent and highly respected, with a reputation that will garner public confidence in his or her ability to perform
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3.
|
The Monitor and Professionals shall not have any prior relationships with the Parties that would undermine public confidence in the objectivity of their work and, subject to Section C.3(e), below, shall not have any conflicts of interest with any Party.
|
(a)
|
The Monitor and Professionals will disclose, and will make a reasonable inquiry to discover, any known current or prior relationships to, or conflicts with, any Party, any Party’s holding company, any subsidiaries of the Party or its holding company, directors, officers, and law firms.
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(b)
|
The Monitor and Professionals shall make a reasonable inquiry to determine whether there are any facts that a reasonable individual would consider likely to create a conflict of interest for the Monitor or Professionals. The Monitor and Professionals shall disclose any conflict of interest with respect to any Party.
|
(c)
|
The duty to disclose a conflict of interest or relationship pursuant to this Section C.3 shall remain ongoing throughout the course of the Monitor’s and Professionals’ work in connection with this Consent Judgment.
|
(d)
|
All Professionals shall comply with all applicable standards of professional conduct, including ethics rules and rules pertaining to conflicts of interest.
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(e)
|
To the extent permitted under prevailing professional standards, a Professional’s conflict of interest may be waived by written agreement of the Monitor and Servicer.
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(f)
|
Servicer or the Monitoring Committee may move the Court for an order disqualifying any Professional on the grounds that such Professional has a conflict of interest that has inhibited or could inhibit the Professional’s ability to act in good faith and with integrity and fairness toward all Parties.
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4.
|
The Monitor must agree not to be retained by any Party, or its successors or assigns, for a period of two years after the conclusion of the terms of the engagement. Any Professionals who work on the engagement must agree not to work on behalf of Servicer, or its successor or assigns, for a period of 1 year after the conclusion of the term of the engagement (the “Professional Exclusion Period”). Any Firm that performs work with respect to Servicer on the engagement must agree not to perform work on behalf of Servicer, or its successor or assigns, that consists of advising Servicer on a response to the Monitor’s review during the engagement and for a period of six months after the conclusion of the term of the engagement (the “Firm Exclusion Period”). The Professional Exclusion Period, Firm Exclusion Period, and terms of exclusion may be altered on a case-by-case basis upon written agreement of Servicer and the Monitor. The Monitor shall organize the work of any Firms so as to minimize the potential for any appearance of, or actual, conflicts.
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5.
|
It shall be the responsibility of the Monitor to determine whether Servicer is in compliance with the Servicing Standards and whether Servicer has satisfied the Consumer Relief Requirements in accordance with the authorities provided herein and to report his or her findings as provided in Section D.3, below.
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6.
|
The manner in which the Monitor will carry out his or her compliance responsibilities under this Consent Judgment and, where applicable, the methodologies to be utilized shall be set forth in a work plan agreed upon by Servicer and the Monitor, and not objected to by the Monitoring Committee (the “Work Plan”).
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7.
|
Servicer will designate an internal quality control group that is independent from the line of business whose performance is being measured (the “Internal Review Group”) to perform compliance reviews each calendar quarter (“Quarter”) in accordance with the terms and conditions of the Work Plan (the “Compliance Reviews”) and satisfaction of the Consumer Relief Requirements after the (A) end of each calendar year (and, in the discretion of the Servicer, any Quarter) and (B) earlier of the Servicer assertion that it has satisfied its obligations thereunder and the third anniversary of the Effective Date (the “Satisfaction Review”). For the purposes of this provision,
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8.
|
The Internal Review Group shall have the appropriate authority, privileges, and knowledge to effectively implement and conduct the reviews and metric assessments contemplated herein and under the terms and conditions of the Work Plan.
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9.
|
The Internal Review Group shall have personnel skilled at evaluating and validating processes, decisions, and documentation utilized through the implementation of the Servicing Standards. The Internal Review Group may include non-employee consultants or contractors working at Servicer’s direction.
|
10.
|
The qualifications and performance of the Internal Review Group will be subject to ongoing review by the Monitor. Servicer will appropriately remediate the reasonable concerns of the Monitor as to the qualifications or performance of the Internal Review Group.
|
11.
|
Servicer’s compliance with the Servicing Standards shall be assessed via metrics identified and defined in Schedule E-1 hereto (as supplemented from time to time in accordance with Section C.22, below, the “Metrics”). The threshold error rates for the Metrics are set forth in Schedule E-1 (as supplemented from time to time in accordance with Section C.22, below, the “Threshold Error Rates”). The Internal Review Group shall perform test work to compute the Metrics each Quarter, and report the results of that analysis via the Compliance Reviews. The Internal Review Group shall perform test work to assess the satisfaction of the Consumer Relief Requirements within 45 days after the (A) end of each calendar year (and, in the discretion of the Servicer, any Quarter) and (B) earlier of (i) the end of the Quarter in which Servicer asserts that it has satisfied its obligations under the Consumer Relief Provisions and (ii) the Quarter during which the third anniversary of the Effective Date occurs, and report that analysis via the Satisfaction Review.
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12.
|
Servicer and the Monitor shall reach agreement on the terms of the Work Plan within 90 days of the Monitor’s appointment, which time can be extended for good cause by agreement of Servicer and the Monitor. If such Work Plan is not objected to by the Monitoring Committee within 20 days, the Monitor shall proceed to implement the Work Plan. In the event that Servicer and the Monitor cannot agree on the terms of the Work Plan within 90 days or the agreed upon terms are not acceptable to the Monitoring Committee, Servicer and Monitoring Committee or the Monitor shall jointly
|
13.
|
The Work Plan may be modified from time to time by agreement of the Monitor and Servicer. If such amendment to the Work Plan is not objected to by the Monitoring Committee within 20 days, the Monitor shall proceed to implement the amendment to the Work Plan. To the extent possible, the Monitor shall endeavor to apply the Servicing Standards uniformly across all Servicers.
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14.
|
The following general principles shall provide a framework for the formulation of the Work Plan:
|
(a)
|
The Work Plan will set forth the testing methods and agreed procedures that will be used by the Internal Review Group to perform the test work and compute the Metrics for each Quarter.
|
(b)
|
The Work Plan will set forth the testing methods and agreed procedures that will be used by Servicer to report on its compliance with the Consumer Relief Requirements of this Consent Judgment, including, incidental to any other testing, confirmation of state-identifying information used by Servicer to compile state-level Consumer Relief information as required by Section D.2.
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(c)
|
The Work Plan will set forth the testing methods and procedures that the Monitor will use to assess Servicer’s reporting on its compliance with the Consumer Relief Requirements of this Consent Judgment.
|
(d)
|
The Work Plan will set forth the methodology and procedures the Monitor will utilize to review the testing work performed by the Internal Review Group.
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(e)
|
The Compliance Reviews and the Satisfaction Review may include a variety of audit techniques that are based on an appropriate sampling process and random and risk-based selection criteria, as appropriate and as set forth in the Work Plan.
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(f)
|
In formulating, implementing, and amending the Work Plan, Servicer and the Monitor may consider any relevant information relating to patterns in complaints by borrowers, issues or deficiencies reported to the Monitor with respect to the Servicing Standards, and the results of prior Compliance Reviews.
|
(g)
|
The Work Plan should ensure that Compliance Reviews are
|
(h)
|
Following implementation of the Work Plan, Servicer shall be required to compile each Metric beginning in the first full Quarter after the period for implementing the Servicing Standards associated with the Metric, or any extension approved by the Monitor in accordance with Section A, has run.
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15.
|
So that the Monitor may determine whether Servicer is in compliance with the Servicing Standards, Servicer shall provide the Monitor with its regularly prepared business reports analyzing Executive Office servicing complaints (or the equivalent); access to all Executive Office servicing complaints (or the equivalent) (with appropriate redactions of borrower information other than borrower name and contact information to comply with privacy requirements); and, if Servicer tracks additional servicing complaints, quarterly information identifying the three most common servicing complaints received outside of the Executive Office complaint process (or the equivalent). In the event that Servicer substantially changes its escalation standards or process for receiving Executive Office servicing complaints (or the equivalent), Servicer shall ensure that the Monitor has access to comparable information.
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16.
|
So that the Monitor may determine whether Servicer is in compliance with the Servicing Standards, Servicer shall notify the Monitor promptly if Servicer becomes aware of reliable information indicating Servicer is engaged in a significant pattern or practice of noncompliance with a material aspect of the Servicing Standards.
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17.
|
Servicer shall provide the Monitor with access to all work papers prepared by the Internal Review Group in connection with determining compliance with the Metrics or satisfaction of the Consumer Relief Requirements in accordance with the Work Plan.
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18.
|
If the Monitor becomes aware of facts or information that lead the Monitor to reasonably conclude that Servicer may be engaged in a pattern of noncompliance with a material term of the Servicing Standards that is reasonably likely to cause harm to borrowers, the Monitor shall engage Servicer in a review to determine if the facts are accurate or the information is correct.
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19.
|
Where reasonably necessary in fulfilling the Monitor’s responsibilities under the Work Plan to assess compliance with the Metrics or the satisfaction of the Consumer Relief Requirements, the Monitor may request information from Servicer in addition to that provided under Sections C.15-18. Servicer
|
20.
|
Where reasonably necessary in fulfilling the Monitor’s responsibilities under the Work Plan to assess compliance with the Metrics or the satisfaction of the Consumer Relief Requirements, the Monitor may interview Servicer’s employees and agents, provided that the interviews shall be limited to matters related to Servicer’s compliance with the Metrics or the Consumer Relief Requirements, and that Servicer shall be given reasonable notice of such interviews.
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21.
|
Where the Monitor reasonably determines that the Internal Review Group’s work cannot be relied upon or that the Internal Review Group did not correctly implement the Work Plan in some material respect, the Monitor may direct that the work on the Metrics (or parts thereof) be reviewed by Professionals or a third party other than the Internal Review Group, and that supplemental work be performed as necessary.
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22.
|
If the Monitor becomes aware of facts or information that lead the Monitor to reasonably conclude that Servicer may be engaged in a pattern of noncompliance with a material term of the Servicing Standards that is reasonably likely to cause harm to borrowers or tenants residing in foreclosed properties, the Monitor shall engage Servicer in a review to determine if the facts are accurate or the information is correct. If after that review, the Monitor reasonably concludes that such a pattern exists and is reasonably likely to cause material harm to borrowers or tenants residing in foreclosed properties, the Monitor may propose an additional Metric and associated Threshold Error Rate relating to Servicer’s compliance with the associated term or requirement. Any additional Metrics and associated Threshold Error Rates (a) must be similar to the Metrics and associated Threshold Error Rates contained in Schedule E-1, (b) must relate to material terms of the Servicing Standards, (c) must either (i) be outcome based or (ii) require the existence of policies and procedures required by the Servicing Standards, in a manner similar to Metrics 5.B-E, and (d) must be distinct from, and not overlap with, any other Metric or Metrics. Notwithstanding the foregoing, the Monitor may add a Metric that satisfies (a)-(c) but does not satisfy (d) of the preceding sentence if the Monitor first asks the Servicer to propose, and then implement, a Corrective Action Plan, as defined below, for the material term of the Servicing Standards with which there is a pattern of noncompliance and that is reasonably likely to cause material harm to borrowers or tenants residing in foreclosed properties, and the Servicer fails to implement the Corrective Action Plan according to the timeline agreed to with the Monitor.
|
23.
|
If Monitor proposes an additional Metric and associated Threshold Error Rate pursuant to Section C.22, above, Monitor, the Monitoring Committee,
|
24.
|
Any additional Metric proposed by the Monitor pursuant to the processes in Sections C.22 or C.23 and relating to provision VIII.B.1 of the Servicing Standards shall be limited to Servicer’s performance of its obligations to comply with (1) the federal Protecting Tenants at Foreclosure Act and state laws that provide comparable protections to tenants of foreclosed properties; (2) state laws that govern relocation assistance payments to tenants (“cash for keys”); and (3) state laws that govern the return of security deposits to tenants.
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D.
|
Reporting
|
1.
|
Following the end of each Quarter, Servicer will report the results of its Compliance Reviews for that Quarter (the “Quarterly Report”). The Quarterly Report shall include: (i) the Metrics for that Quarter; (ii) Servicer’s progress toward meeting its payment obligations under this Consent Judgment; and (iii) general statistical data on Servicer’s overall servicing performance described in Schedule Y. Except where an extension is granted by the Monitor, Quarterly Reports shall be due no later than 45 days following the end of the Quarter and shall be provided to: (1) the Monitor and (2) the Board of Servicer or a committee of the Board designated by Servicer. The first Quarterly Report shall cover the first full Quarter after this Consent Judgment is entered.
|
2.
|
Following the end of each Quarter, Servicer will transmit to each state a report (the “State Report”) including general statistical data on Servicer’s servicing performance, such as aggregate and state-specific information regarding the number of borrowers assisted and credited activities conducted pursuant to the Consumer Relief Requirements, as described in Schedule Y. The State Report will be delivered simultaneously with the submission of the Quarterly Report to the Monitor. Servicer shall provide copies of such State Reports to the Monitor and Monitoring Committee.
|
3.
|
The Monitor shall report on Servicer’s compliance with this Consent Judgment in periodic reports setting forth his or her findings (the “Monitor Reports”). The first three Monitor Reports will each cover at least two Quarterly Reports. The first Monitor's Report may, at the Monitor's discretion,
|
4.
|
Prior to issuing any Monitor Report, the Monitor shall confer with Servicer and the Monitoring Committee regarding its preliminary findings and the reasons for those findings. Servicer shall have the right to submit written comments to the Monitor, which shall be appended to the final version of the Monitor Report. Final versions of each Monitor Report shall be provided simultaneously to the Monitoring Committee and Servicer within a reasonable time after conferring regarding the Monitor’s findings. The Monitor Reports shall be filed with the Court overseeing this Consent Judgment and shall also be provided to the Board of Servicer or a committee of the Board designated by Servicer.
|
5.
|
The Monitor Report shall: (i) describe the work performed by the Monitor and any findings made by the Monitor during the relevant period, (ii) list the Metrics and Threshold Error Rates, (iii) list the Metrics, if any, where the Threshold Error Rates have been exceeded, (iv) state whether a Potential Violation has occurred and explain the nature of the Potential Violation, and (v) state whether any Potential Violation has been cured. In addition, following each Satisfaction Review, the Monitor Report shall report on the Servicer’s satisfaction of the Consumer Relief Requirements, including regarding the number of borrowers assisted and credited activities conducted pursuant to the Consumer Relief Requirements, and identify any material inaccuracies identified in prior State Reports. Except as otherwise provided herein, the Monitor Report may be used in any court hearing, trial, or other proceeding brought pursuant to this Consent Judgment pursuant to Section J, below, and shall be admissible in evidence in a proceeding brought under this Consent Judgment pursuant to Section J, below. Such admissibility shall not prejudice Servicer’s right and ability to challenge the findings and/or the statements in the Monitor Report as flawed, lacking in probative value or otherwise. The Monitor Report with respect to a particular Potential Violation shall not be admissible or used for any purpose if Servicer cures the Potential Violation pursuant to Section E, below.
|
6.
|
Upon the satisfaction of any category of payment obligation under this Consent Judgment, Servicer, at its discretion, may request that the Monitor certify that Servicer has discharged such obligation. Provided that the
|
7.
|
Within 120 days of entry of this Consent Judgment, the Monitor shall, in consultation with the Monitoring Committee and Servicer, prepare and present to Monitoring Committee and Servicer an annual budget providing its reasonable best estimate of all fees and expenses of the Monitor to be incurred during the first year of the term of this Consent Judgment, including the fees and expenses of Professionals and support staff (the “Monitoring Budget”). On a yearly basis thereafter, the Monitor shall prepare an updated Monitoring Budget providing its reasonable best estimate of all fees and expenses to be incurred during that year. The Monitor, at his discretion, may alter the timing of the budgeting process so that Servicer may be incorporated into the same billing cycle as signatories to the Consent Judgments filed in the
Bank of America Corp
case referenced above. Absent an objection within 20 days, a Monitoring Budget or updated Monitoring Budget shall be implemented. Consistent with the Monitoring Budget, Servicer shall pay all fees and expenses of the Monitor, including the fees and expenses of Professionals and support staff. The fees, expenses, and costs of the Monitor, Professionals, and support staff shall be reasonable. Servicer may apply to the Court to reduce or disallow fees, expenses, or costs that are unreasonable.
|
E.
|
Potential Violations and Right to Cure
|
1.
|
A “Potential Violation” of this Consent Judgment occurs if the Servicer has exceeded the Threshold Error Rate set for a Metric in a given Quarter. In the event of a Potential Violation, Servicer shall meet and confer with the Monitoring Committee within 15 days of the Quarterly Report or Monitor Report indicating such Potential Violation.
|
2.
|
Servicer shall have a right to cure any Potential Violation.
|
3.
|
Subject to Section E.4, a Potential Violation is cured if (a) a corrective action plan approved by the Monitor (the “Corrective Action Plan”) is determined by the Monitor to have been satisfactorily completed in accordance with the terms thereof; and (b) a Quarterly Report covering the Cure Period (as defined herein) reflects that the Threshold Error Rate has not been exceeded with respect to the same Metric and the Monitor confirms the accuracy of said report using his or her ordinary testing procedures. The Cure Period shall be the first full quarter after completion of the Corrective Action Plan or, if the completion of the Corrective Action Plan occurs within the first month of a Quarter and if the Monitor determines that there is sufficient time remaining, the period between completion of the Corrective Action Plan and the end of
|
4.
|
If after Servicer cures a Potential Violation pursuant to the previous section, another violation occurs with respect to the same Metric, then the second Potential Violation shall immediately constitute an uncured violation for purposes of Section J.3, provided, however, that such second Potential Violation occurs in either the Cure Period or the quarter immediately following the Cure Period.
|
5.
|
In addition to the Servicer’s obligation to cure a Potential Violation through the Corrective Action Plan, Servicer must remediate any material harm to particular borrowers identified through work conducted under the Work Plan. In the event that a Servicer has a Potential Violation that so far exceeds the Threshold Error Rate for a metric that the Monitor concludes that the error is widespread, Servicer shall, under the supervision of the Monitor, identify other borrowers who may have been harmed by such noncompliance and remediate all such harms to the extent that the harm has not been otherwise remediated.
|
6.
|
In the event a Potential Violation is cured as provided in Sections E.3, above, then no Party shall have any remedy under this Consent Judgment (other than the remedies in Section E.5) with respect to such Potential Violation.
|
F.
|
Confidentiality
|
1.
|
These provisions shall govern the use and disclosure of any and all information designated as “CONFIDENTIAL,” as set forth below, in documents (including email), magnetic media, or other tangible things provided by the Servicer to the Monitor in this case, including the subsequent disclosure by the Monitor to the Monitoring Committee of such information. In addition, it shall also govern the use and disclosure of such information when and if provided to the participating state parties or the participating agency or department of the United States whose claims are released through this settlement (“participating state or federal agency whose claims are released through this settlement”).
|
2.
|
The Monitor may, at his discretion, provide to the Monitoring Committee or to a participating state or federal agency whose claims are released through this settlement any documents or information received from the Servicer related to a Potential Violation or related to the review described in Section C.18; provided, however, that any such documents or information so provided shall be subject to the terms and conditions of these provisions. Nothing herein shall be construed to prevent the Monitor from providing documents received from the Servicer and not designated as “CONFIDENTIAL” to a participating state or federal agency whose claims are released through this settlement.
|
3.
|
The Servicer shall designate as “CONFIDENTIAL” that information, document or portion of a document or other tangible thing provided by the Servicer to the Monitor, the Monitoring Committee or to any other participating state or federal agency whose claims are released through this settlement that Servicer believes contains a trade secret or confidential research, development, or commercial information subject to protection under applicable state or federal laws (collectively, “Confidential Information”). These provisions shall apply to the treatment of Confidential Information so designated.
|
4.
|
Except as provided by these provisions, all information designated as “CONFIDENTIAL” shall not be shown, disclosed or distributed to any person or entity other than those authorized by these provisions. Participating states and federal agencies whose claims are released through this settlement agree to protect Confidential Information to the extent permitted by law.
|
5.
|
This agreement shall not prevent or in any way limit the ability of a participating state or federal agency whose claims are released through this settlement to comply with any subpoena, Congressional demand for documents or information, court order, request under the Right of Financial Privacy Act, or a state or federal public records or state or federal freedom of information act request; provided, however, that in the event that a participating state or federal agency whose claims are released through this settlement receives such a subpoena, Congressional demand, court order or other request for the production of any Confidential Information covered by this Order, the state or federal agency shall, unless prohibited under applicable law or unless the state or federal agency would violate or be in contempt of the subpoena, Congressional demand, or court order, (1) notify the Servicer of such request as soon as practicable and in no event more than ten (10) calendar days of its receipt or three calendar days before the return date of the request, whichever is sooner, and (2) allow the Servicer ten (10) calendar days from the receipt of the notice to obtain a protective order or stay of production for the documents or information sought, or to otherwise resolve the issue, before the state or federal agency discloses such documents or information. In all cases covered by this Section, the state or federal agency shall inform the requesting party that the documents or information sought were produced subject to the terms of these provisions.
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G.
|
Dispute Resolution Procedures.
Servicer, the Monitor, and the Monitoring Committee will engage in good faith efforts to reach agreement on the proper resolution of any dispute concerning any issue arising under this Consent Judgment, including any dispute or disagreement related to the withholding of consent, the exercise of discretion, or the denial of any application. Subject to Section J, below, in the event that a dispute cannot be resolved, Servicer, the Monitor, or the Monitoring Committee may petition the Court for resolution of the dispute. Where a provision of this agreement requires agreement, consent of, or approval of any application or
|
H.
|
Consumer Complaints.
Nothing in this Consent Judgment shall be deemed to interfere with existing consumer complaint resolution processes, and the Parties are free to bring consumer complaints to the attention of Servicer for resolution outside the monitoring process. In addition, Servicer will continue to respond in good faith to individual consumer complaints provided to it by State Attorneys General or State Financial Regulators in accordance with the routine and practice existing prior to the entry of this Consent Judgment, whether or not such complaints relate to Covered Conduct released herein.
|
I.
|
Relationship to Other Enforcement Actions.
Nothing in this Consent Judgment shall affect requirements imposed on the Servicer pursuant to Consent Orders issued by the appropriate Federal Banking Agency (FBA), as defined in 12 U.S.C. § 1813(q), against the Servicer. In conducting their activities under this Consent Judgment, the Monitor and Monitoring Committee shall not impede or otherwise interfere with the Servicer’s compliance with the requirements imposed pursuant to such Orders or with oversight and enforcement of such compliance by the FBA.
|
J.
|
Enforcement
|
1.
|
Consent Judgment.
This Consent Judgment shall be filed in the U.S. District Court for the District of Columbia (the “Court”) and shall be enforceable therein. Servicer and the Releasing Parties shall waive their rights to seek judicial review or otherwise challenge or contest in any court the validity or effectiveness of this Consent Judgment. Servicer and the Releasing Parties agree not to contest any jurisdictional facts, including the Court’s authority to enter this Consent Judgment.
|
2.
|
Enforcing Authorities.
Servicer’s obligations under this Consent Judgment shall be enforceable solely in the U.S. District Court for the District of Columbia. An enforcement action under this Consent Judgment may be brought by any Party to this Consent Judgment or the Monitoring Committee. Monitor Report(s) and Quarterly Report(s) shall not be admissible into evidence by a Party to this Consent Judgment except in an action in the Court to enforce this Consent Judgment. In addition, unless immediate action is necessary in order to prevent irreparable and immediate harm, prior to commencing any enforcement action, a Party must provide notice to the Monitoring Committee of its intent to bring an action to enforce this Consent Judgment. The members of the Monitoring Committee shall have no more than 21 days to determine whether to bring an enforcement action. If the members of the Monitoring Committee decline to bring an enforcement action, the Party must wait 21 additional days after such a determination by the members of the Monitoring Committee before commencing an enforcement action.
|
3.
|
Enforcement Action.
In the event of an action to enforce the obligations of Servicer and to seek remedies for an uncured Potential Violation for which Servicer’s time to cure has expired, the sole relief available in such an action will be:
|
(a)
|
Equitable Relief. An order directing non-monetary equitable relief, including injunctive relief, directing specific performance under the terms of this Consent Judgment, or other non-monetary corrective action.
|
(b)
|
Civil Penalties. The Court may award as civil penalties an amount not more than $1 million per uncured Potential Violation; or, in the event of a second uncured Potential Violation of Metrics 1.a, 1.b, or 2.a (
i.e.
, a Servicer fails the specific Metric in a Quarter, then fails to cure that Potential Violation, and then in subsequent Quarters, fails the same Metric again in a Quarter and fails to cure that Potential Violation again in a subsequent Quarter), where the final uncured Potential Violation involves widespread noncompliance with that Metric, the Court may award as civil penalties an amount not more than $5 million for the second uncured Potential Violation.
|
(c)
|
Any penalty or payment owed by Servicer pursuant to the Consent Judgment shall be paid to the clerk of the Court or as otherwise agreed by the Monitor and the Servicer and distributed by the Monitor as follows:
|
1.
|
In the event of a penalty based on a violation of a term of the Servicing Standards that is not specifically related to conduct in bankruptcy, the penalty shall be allocated, first, to cover the costs incurred by any state or states in prosecuting the violation, and second, among the participating states according to the same allocation as the State Payment Settlement Amount.
|
2.
|
In the event of a penalty based on a violation of a term of the Servicing Standards that is specifically related to conduct in bankruptcy, the penalty shall be allocated to the United States or as otherwise directed by the Director of the United States Trustee Program.
|
3.
|
In the event of a payment due under Paragraph 10.d of the Consumer Relief requirements, 50% of the payment shall be allocated to the United States, and 50% shall be allocated to the State Parties to the Consent Judgment, divided among
|
K.
|
Sunset.
This Consent Judgment and all Exhibits shall retain full force and effect for three and one-half years from the date it is entered (the “Term”), unless otherwise specified in the Exhibit. The duration of the Servicer’s obligations under the Servicing Standards set forth in Exhibit A shall be reduced to a period of three years from the date of the entry of the Consent Judgment, if at the end of the third year, the Monitor’s two servicing standard compliance reports immediately prior to that date reflect that the Servicer had no Potential Violations during those reporting periods, or any Corrective Action Plans that the Monitor had not yet certified as completed. Servicer shall submit a final Quarterly Report for the last quarter or portion thereof falling within the Term, and shall cooperate with the Monitor’s review of said report, which shall be concluded no later than six months following the end of the Term, after which time Servicer shall have no further obligations under this Consent Judgment.
|
P.
|
9037; and
|
(n)
|
Any liability based upon obligations created by this Consent
|
(1)
|
the matters covered by the Consent Judgment;
|
(2)
|
the United States’ audits and civil investigations of the
|
(3)
|
SunTrust’s investigation, defense, and corrective actions undertaken in response to the United States’ audit(s) and civil investigation(s) in connection with the matters covered by the Consent Judgment (including attorney’s fees);
|
(4)
|
the negotiation and performance of the Consent Judgment; and
|
(5)
|
the payments SunTrust makes to the United States or others pursuant to the Consent Judgment,
|
(6)
|
are unallowable costs for government contracting purposes (“Unallowable Costs”).
|
I.
|
Covered Conduct
|
II.
|
Release of Covered Conduct
|
III.
|
Covenants by SunTrust
|
IV.
|
Claims and Other Actions Exempted from Release
|
1.
|
This Exhibit I amends and modifies the terms and provisions of Exhibits D and D-1. For clarity, the terms agreed to in this Exhibit are in addition to, and not in lieu of terms agreed elsewhere in the Consent Judgment and its exhibits. To the extent that this Exhibit I and Exhibits D or D-1 or other provisions of the Consent Judgment have inconsistent or conflicting terms and provisions, this Exhibit I shall be controlling and shall govern the agreement among the Parties. Whenever Exhibits D or D-1 are referenced in this Exhibit I or elsewhere in the Consent Judgment and exhibits, it shall mean Exhibits D or D-1 as amended and modified by this Exhibit I. References to Servicer in Exhibits D, D-1, and I shall mean SunTrust Banks, Inc. including its affiliates and subsidiaries (“Servicer” or “SunTrust”).
|
2.
|
Pursuant to Paragraph 3 of the Consent Judgment, Defendant shall pay a Direct Payment Settlement Amount of $50,000,000, by electronic funds transfer within ten days of receiving notice that the escrow account referenced in Paragraph 3 of the Consent Judgment is established or within ten days after the entry of the Consent Judgment (“Effective Date”), whichever is later.
|
3.
|
Defendant shall be responsible for $500,000,000 in consumer relief as set forth in Exhibit D and credited pursuant to the terms of Exhibits D and D-1.
|
a.
|
The Servicer’s $500,000,000 consumer relief obligation will be allocated as follows:
|
i.
|
The Servicer will provide a minimum of $187,500,000 in creditable relief to consumers who meet the eligibility criteria in the forms and amounts described in Paragraphs 1 or 2 of Exhibit D and/or Paragraph 6 of Exhibit I (“1st/2nd Lien Principal Reduction Obligation”). No less than
|
ii.
|
The Servicer will provide a minimum of $25,000,000 in creditable relief to consumers who meet the eligibility criteria in the forms and amounts described in Paragraph 9 of Exhibit D and/or in Paragraph 5 of Exhibit I
|
iii.
|
The Servicer may not receive credit of more than $100,000,000 for relief provided to consumers who meet the eligibility criteria in the forms and amounts described in Paragraph 4 of Exhibit I (“Lending Cap”).
|
b.
|
Notwithstanding anything to the contrary in the Consent Judgment or the Exhibits thereto, Defendant will be obligated to make the payments specified in Paragraph 10.d of Exhibit D in the event and to the extent that Servicer or its successors in interest do not complete the Consumer Relief Requirements set forth in Exhibit D.
|
c.
|
The releases contained in Exhibits F and G of the Consent Judgment shall become effective upon payment of the Direct Payment Settlement Amount by Defendant. The United States and any State Party may withdraw from the Consent Judgment and declare it null and void with respect to that party and all released entities if the Consumer Relief Requirements (as that term is defined in Exhibit F (Federal Release)) required under this Consent Judgment are not completed within the time specified and any payment required under Paragraph 10.d of Exhibit D is not made within thirty days of written notice by the party. However, the United States may not void the terms and releases set forth in Exhibits J and K.
|
4.
|
Low to Moderate Income and Hardest Hit Area Lending Program (“Lending Program”).
|
a.
|
Eligibility Criteria. The Eligibility Criteria for the Lending Program are the following:
|
i.
|
Purchase-money mortgages originated after January 1, 2014 to credit- worthy borrowers whose income is no greater than 80% of the area median income (“AMI”) as calculated in accordance with the parameters used by the U.S. Department of Housing and Urban Development and who (1) are first time homebuyers or (2) who are buying homes in hardest hit areas as set forth in Appendix A (“Hardest Hit Areas”) or (3) who have previously lost a home to foreclosure or short sale; and
|
ii.
|
The borrower intends to occupy the home. The Servicer may rely on the borrower’s stated intent to occupy the home when evidencing the borrower’s intent to occupy.
|
b.
|
Crediting. Credits for relief provided under this program will be calculated according to the following terms:
|
i.
|
The Servicer will receive a $10,000 credit against Defendant's consumer relief obligation for each eligible mortgage loan originated by the Servicer.
|
ii.
|
The Servicer will receive an additional 25% credit for any eligible mortgage loan made by the Servicer to a borrower who is purchasing a home in the Hardest Hit Areas.
|
iii.
|
The Servicer will receive an additional 25% credit for any eligible mortgage loan made by the Servicer to a borrower between January 1, 2014 and January 1, 2015
|
c.
|
Borrower Outreach Program in Hardest Hit Areas.
|
i.
|
The Servicer will in good faith take steps substantially similar to some of the examples described below to increase borrower awareness of the Lending Program and principal reduction loss mitigation options available pursuant to this Agreement in Hardest Hit Areas. The following are illustrative examples of the steps the Servicer may take to satisfy this requirement: partner and/or co-brand with reputable housing assistance or non-profit consumer or housing counseling agencies of its choosing to increase borrower awareness of the Lending Program; sponsor borrower outreach events targeted at Hardest Hit Areas; provide information and/or training regarding the Lending Program to the Servicer’s origination agents who are active in Hardest Hit Areas; provide information and/or training regarding the Lending Program and principal reduction loss mitigation options to reputable housing assistance or non-profit consumer or housing counseling agencies that are active in Hardest Hit Areas; and/or increase the Servicer’s advertising efforts targeted to reach potential borrowers living in or considering home purchase financing in Hardest Hit Areas.
|
ii.
|
The Servicer must employ one or more activities in satisfaction of the requirement in Paragraph 4.c.i., above, on a scheduled and sustained basis unless and until it (1) reports to the Monitor that it has fulfilled its total consumer relief obligation, or (2) informs the Monitor in writing that it no longer intends to seek credit for activities under the Lending Program or for bonus credit associated with 1st and 2nd lien principal reduction modifications in Hardest Hit Areas. The Servicer may not receive credit under the Lending Program or receive the bonus associated with 1st and 2nd lien principal reduction modifications in Hardest Hit Areas for any activity initiated after the date on which it informs the Monitor of its intention to no longer seek credit for activities under the Lending Program.
|
iii.
|
The Monitor will evaluate and certify the Servicer’s compliance with paragraph 4.c.i. above using a methodology similar to the methodology employed to determine the Servicers’ compliance with the Mandatory Relief Requirements set forth in Exhibit E to the Consent Judgment entered in United States, et al. v. Bank of America Corp., et al., No. 12- civ-00361-RMC (April 4, 2012) (Docket Nos. 10-14).
|
5.
|
Additional Rate Reduction Programs. The Servicer may establish programs satisfying the conditions set forth below, and rate relief provided through these programs will receive credit against its Refinancing Obligation in the manner as described below. Except where specified below, the calculation of credit for these programs will be consistent with Paragraph 9 of Exhibit D. In accordance with Paragraph 9.b of Exhibit D, Servicer will not be required to solicit or offer Rate Reduction Program relief on loans under circumstances that, in the reasonable judgment of the Servicer, would result in TDR treatment.
|
a.
|
Rate Relief Program.
|
i.
|
Eligibility Criteria. The Eligibility Criteria for the Rate Relief Program are the following:
|
A.
|
The borrower’s LTV is greater than 100%, or is greater than 80% if the borrower would not have qualified for a refinance under the Servicer’s generally-available refinance programs as of June 30, 2013;
|
B.
|
The loan to be modified is a first lien and was originated prior to January 1, 2009;
|
C.
|
The borrower is current on the loan, and has not had more than one delinquency of at most 30 days within the prior 12 months; and
|
D.
|
The current interest rate on the loan is at least 5.25%, including but not limited to interest-only loans.
|
E.
|
Borrowers need not have underwriting based on income.
|
ii.
|
Relief. Borrowers meeting the Eligibility Criteria will be offered the following:
|
A.
|
A new fixed rate mortgage at or below current conforming rates (as indicated by the Primary Mortgage Market Survey Rate (“PMMS”) at the time the modification or refinance is evaluated);
|
B.
|
Minimum payment relief of $100/month; and
|
C.
|
No future interest rate increases, changes in term, or additional costs to the borrower.
|
D.
|
Relief may be provided through a modification or refinance.
|
b.
|
Payment Shock Relief Program.
|
i.
|
Eligibility Criteria. The same eligibility criteria in Paragraph 9.a of Exhibit D, shall
|
A.
|
The subject loan is a first lien that is at imminent risk of default, consistent with Paragraph 1.c. of Exhibit D, due to being an interest- only loan or other high-risk mortgage product that may reset, resulting in a payment shock to the borrower.
|
B.
|
The current interest rate may be at or below the greater of 5.25% or PMMS plus 100 basis points.
|
C.
|
Borrowers need not have underwriting based on income.
|
ii.
|
Relief. Borrowers meeting the Eligibility Criteria for this program will be offered the following:
|
A.
|
A fully amortizing 30-year loan with a fixed interest rate no greater than PMMS plus 75 basis points; or a fully amortizing 30-year, 1- year LIBOR ARM at a 175 basis point margin.
|
B.
|
Relief may be provided through a modification or refinance.
|
iii.
|
For purposes of calculating credit under Paragraph 9 of Exhibit D:
|
A.
|
Permanent margin reductions for post-modification 30-year ARMs will be treated consistent with Paragraph 9.e of Exhibit D.
|
c.
|
Second Lien Rate Reduction Program
|
i.
|
Eligibility Criteria. The same eligibility criteria in Paragraph 9.a of Exhibit D, applied to second liens, shall be the Eligibility Criteria for the Second Lien Reduction Program, except as follows:
|
A.
|
The program shall apply to Servicer owned second lien mortgage loans;
|
B.
|
The combined LTV must be greater than 100%;
|
C.
|
The current interest rate is at least 5.25%.
|
ii.
|
Relief. Borrowers meeting the Eligibility Criteria for this program will be offered a modification or refinance that meets the requirements set forth in Paragraphs 9.c and 9.d of Exhibit D, as applied to second liens, except that the Servicer will reduce the borrower’s rate by at least 200 basis points. However, the Servicer will not be obligated to reduce the borrower’s rate to below 4%.
|
iii.
|
Credit. Credits for relief provided under this program will be calculated at 90% of the calculation set forth in Paragraph 9.e of Exhibit D. The amount of credit
|
d.
|
Notwithstanding the success or failure of a Refinancing Program in putting borrowers in sustainable mortgages, the Servicer shall be obligated to satisfy the commitment set forth in Paragraph 3 above; failure to satisfy the commitment set forth in Paragraph 3 shall result in an additional payment as set forth in Paragraph 10 of the Consumer Relief Requirements contained in Exhibit D.
|
6.
|
Second Lien Principal Modification Program
|
a.
|
Eligibility Criteria. For purposes of crediting second lien principal reduction modifications under Paragraph 2 of Exhibit D, the eligibility criteria may also include:
|
i.
|
A current second lien that is at imminent risk of default due to being, among other things, an interest-only loan, delinquent senior lien, or other high-risk mortgage product that may reset, resulting in a payment shock to the borrower. Servicer need not require income verification for these borrowers.
|
b.
|
Provided a second lien modification is otherwise creditable under this Paragraph 6, the Servicer will receive credit for modifications to loans where personal liability has been discharged in Chapter 7 bankruptcy, the borrower continues to occupy the property, the borrower remains current on payments post-discharge, and the underlying lien has not been extinguished.
|
c.
|
Relief. Borrowers may receive 100% principal forgiveness on their second liens except for situations where the Servicer owns or services the first lien loan on the same property and knows the first lien is to be foreclosed on or is subject to a foreclosure sale in the next 30 days.
|
d.
|
Credit. Credits for relief provided under this program will be calculated in accordance with the provisions set forth in Paragraph 2 of Exhibit D, and in accordance with the crediting formula set forth in Paragraph 2.i of Exhibit D-1.
|
7.
|
Borrower Solicitation. The Servicer will solicit all borrowers in its loan portfolio who are eligible for the Rate Relief Program as of the Effective Date (“Eligible Borrowers”). The Servicer will solicit as follows:
|
a.
|
Such solicitation shall commence as soon as reasonably practicable following the Effective Date and solicitations shall be sent to Eligible Borrowers in accordance with the timeline set forth in the Servicer’s work plan until the Servicer reports to the Monitor that it has satisfied its Refinancing Obligation. Any borrower who accepts an offer made under a Rate Relief Program within 3 months from the date the Servicer sends the borrower a refinance or modification agreement (which shall be the first calendar day
|
b.
|
The Borrower Solicitation Requirements shall not apply to solicitations for modification programs other than Rate Relief Program (which may be conducted contemporaneously), to solicitations to a particular Eligible Borrower that occur after that particular Eligible Borrower has been previously solicited, in compliance with this agreement, to Eligible Borrowers under the Rate Relief Program who (1) accepted another home retention option after the Effective Date of this Consent Judgment, or (2) who accepted a non-home retention option prior to the date the Servicer made a final determination that the borrower was an Eligible Borrower provided that the borrower was informed about and offered a modification under the Rate Reduction Program. Additionally, the Servicer is not required to solicit Eligible Borrowers whose loans are no longer serviced by the Servicer at the time the Servicer identifies the Eligible Borrower for solicitation.
|
c.
|
Requirements for solicitations under this paragraph shall include:
|
i.
|
The Servicer will issue an initial proactive correspondence letter to borrowers advising them they are eligible for the Rate Relief Program (“Proactive Correspondence”). If the borrower expresses an interest in the Rate Relief Program, Servicer shall send the pre-approved refinance or modification agreement (as appropriate) to the borrower for execution. These packages will be sent via overnight delivery services (
e.g.
, Federal Express) with return receipt/delivery confirmation.
|
ii.
|
If the borrower does not return the agreement after being sent the package, the Servicer will call the Eligible Borrower.
|
iii.
|
If the Servicer is not successful in communicating with the borrower following the initial Proactive Correspondence, the Servicer will send a second Proactive Correspondence on or about 30 days after the mailing of the initial Proactive Correspondence.
|
iv.
|
The Servicer, as part of any contact with borrowers, whether by telephone, mail or otherwise, shall (1) advise borrowers that they may be eligible for a Rate Relief
|
8.
|
Other Matters.
|
a.
|
Menu Items. With respect to Exhibit D and D-1 Table 1 “Credit Towards Settlement,” the following modification and amendments shall apply:
|
A.
|
By replacing all references to LTV of 120% with LTV of 110%; and
|
iv.
|
Exhibit D, Paragraph 1.e is amended as follows: By adding a subparagraph 1.e.iii, which shall read: “When the borrower’s pre-modification LTV ratio is below 100%, then the borrower’s post-modification LTV shall not be lower than 80%.”
|
v.
|
Exhibit D, Paragraph 1.f applies to the following categories of loans:
|
A.
|
Regardless of delinquency, modifications made to borrowers in an active bankruptcy; or for borrowers who have received Chapter 7 bankruptcy discharges of personal liability for the loans, who continue to occupy the properties, who remain current on payments, and where the underlying lien has not been extinguished;
|
B.
|
Regardless of delinquency, modifications made to borrowers involved in active litigation;
|
C.
|
Modifications made to borrowers who are current (less than 30 days delinquent) on a mortgage modification made prior to the terms of this Agreement or that does not meet the terms set forth in this Agreement.
|
vi.
|
Exhibit D, Paragraph 1.h is amended to read as follows: “Following Servicer’s Effective Date, Servicer will modify a second lien mortgage loan consistent with the treatment waterfall described below, and as modified by Exhibit I, within a reasonable time to facilitate a Participating Servicer’s modification of a first lien mortgage owned by the Participating Servicer, provided that the Participating Servicer who owns the first lien mortgage contacts Servicer regarding the second lien mortgage loan that Servicer owns and provides reasonably satisfactory documentation of the first lien mortgage actively being considered for modification. Credit for such second lien mortgage loan write
|
vii.
|
Exhibit D Paragraph 9.c is amended as follows by adding subparagraph 9.c.i.4: For loans with current interest rates above 5.25% or PMMS +100 basis points, whichever is greater, the interest rate may be reduced for 7 years. After the 7 year fixed interest rate period, the rate will be set at the then-current 1-year LIBOR plus 175 basis points, subject to a maximum rate increase of 2% in the first year (the maximum rate is based off of the fixed rate that applied during the 7-year term), 2% in any year following the first year, and a maximum 5% total increase for the life of the loan (the maximum rate is based off of the fixed rate that applied during the 7-year term). The relief described herein may also be offered in Exhibit I Paragraphs 5.a.ii.A, 5.b.ii.A, and 5.c.ii.
|
viii.
|
Exhibit D Paragraph 9.c is amended as follows by adding subparagraph 9.c.i.5: For loans with current interest rates below 5.25% or PMMS +100 basis points, the interest rate may be reduced to obtain at least a 25 basis point interest rate reduction or $100 payment reduction in monthly payment, for a period of 7 years. After the 7 year fixed interest rate period, the rate will be set at the then-current 1-year LIBOR plus 175 basis point, subject to a maximum rate increase of 2% in the first year (the maximum rate is based off of the fixed rate that applied during the 7-year term), 2% in any year following the first year, and a 5% total increase for the life of the loan (the maximum rate is based off of the fixed rate that applied during the 7-year term). The relief described herein may also be offered in Exhibit I Paragraph 5.b.ii.A.
|
ix.
|
Exhibit D Paragraph 9.e is amended as follows by adding Paragraph 9.e.3: If the new rate applies for 7 years, the multiplier shall be 6.
|
x.
|
Exhibit D, Paragraph 9.f is amended to read as follows: “Additional dollars spent by Servicer on the refinancing program beyond Servicer's required commitment shall be credited against Servicer's overall consumer relief obligation, provided that any such credit shall not reduce or count against Servicer's minimum 1st Lien Principal Reduction Obligation or “1st/2nd Lien Principal Reduction Obligation.”.
|
xi.
|
The Servicer will receive credit for activities set forth in Paragraph 9 of Exhibit D and Paragraph 5 of Exhibit I for loans discharged in Chapter 7 bankruptcy provided the Servicer maintains a valid lien on the property, the borrower remains in the home, the borrower remains current on payments post-discharge, and the loss mitigation activity is otherwise creditable under Paragraph 9 of Exhibit D or Paragraph 5 of Exhibit I.
|
xii.
|
Exhibit D, Paragraph 10.a is amended to read as follows: “For the consumer relief and refinancing activities imposed by this Agreement, Servicer shall be entitled to receive credit against Servicer’s outstanding settlement commitments for activities taken on or after Servicer's start date, July 1, 2013 (such date, the “Start Date”), including without limitation any creditable activity that occurred before the completion and approval of any Work Plan.”
|
xiii.
|
Exhibit D, Paragraph 10.b is amended to read as follows: “Servicer shall receive an additional 25% credit against Servicer’s outstanding settlement commitments for any first or second lien principal reduction, any amounts credited pursuant to the refinancing program, and any amounts credited pursuant to the Lending Program between January 1, 2014 and January 1, 2015. This early incentive credit is cumulative with other credits (including Hardest Hit).”
|
xiv.
|
Exhibit D, Paragraph 10.c is amended to read as follows: “Servicer shall complete 75% of its Consumer Relief Requirement credits within two years of the Effective Date.”
|
xv.
|
Exhibit D, Paragraph 10.d is amended to read as follows: “If Servicer fails to meet the commitment set forth in these Consumer Relief Requiremenst within three years of the Effective Date, Servicer shall pay an amount equal to 125% of the unmet commitment amount; except that if Servicer fails to meet the two year commitment noted above, and then fails to meet the three year commitment, the Servicer shall pay an amount equal to 140% of the unmet three-year commitment amount; provided, however, that if Servicer must pay any Participating State for failure to meet the obligations of a state- specific commitment to provide Consumer Relief pursuant to the terms of that commitment, then Servicer's obligation to pay under this provision shall be reduced by the amount that such a Participating State would have received under this provision and the Federal portion of the payment attributable to that Participating State. The purpose of the 125% and 140% amount is to encourage Servicer to meet its commitments set forth in these Consumer Relief Requirements.”
|
xvi.
|
Exhibit D-1, Paragraphs 1 and 2 Credit Caps are deleted, except that the cap on “forgiveness of forbearance amounts on existing modification” will remain 12.5%.
|
xvii.
|
Exhibit D-1, Paragraph 3 Credit Cap is amended by replacing “5%” with “10”.
|
xviii.
|
Exhibit D-1, Footnote 2 is amended to read as follows: “Credit for all modifications is determined from the date the modification is approved (the date on which the Servicer decides to offer the modification to the borrower) or communicated to the borrower. No credits will be credited unless the payments on the modification are current as of 90 days following the
|
xix.
|
The Servicer will receive an additional 25% credit for any first or second lien principal reduction modifications made, pursuant to Paragraphs 1 and 2 of Exhibit D and Paragraph 6 of Exhibit I, to borrowers in Hardest Hit Areas. This credit is conditioned on Servicer’s satisfaction of the outreach requirements as set forth in Paragraph 4.C.iii
|
a.
|
Any liability arising under Title 26, U.S. Code (Internal Revenue
|
b.
|
Any criminal liability;
|
c.
|
Except as explicitly stated in this Release, any administrative liability, including the suspension and debarment rights of any federal agency;
|
d.
|
Any liability to the United States (or its agencies) for any conduct other than the conduct set forth in Attachment A;
|
e.
|
Any liability based upon obligations created by this Release;
|
f.
|
Any liability for personal injury or property damage or for other consequential damages arising from the conduct set forth in Attachment A;
|
1
|
The term “affiliated entities” as used here is defined in paragraph 10 of Exhibit F.
|
2
|
The term “Covered Servicing Conduct” as used here is defined in paragraph C of Exhibit F.
|
3
|
The term “Covered Origination Conduct” as used here is defined in paragraph D of Exhibit F.
|
2.1
|
“Affiliate”
means for any Plan Year any organization that is a member of a controlled group of businesses within the meaning of Code Sections 414(b), (c) and (m) of which SunTrust is a member and any other entity which is considered to be a single employer with SunTrust under Code Section 414(o).
|
2.2
|
“AIP”
means the SunTrust Banks, Inc. Annual Incentive Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in Control, any successor to such plan in which the Executive is eligible to participate and which provides an opportunity for a short-term bonus for the Executive which is comparable to the opportunity which the Executive had under such plan before such Change in Control or, if the Executive reasonably determines that there is no such plan in which the Executive is eligible to participate but SunTrust or a parent corporation maintains a short term bonus plan for the benefit of senior executives which provides for such an opportunity, such other plan as agreed to by the Executive and (1) with respect to the Chief Executive Officer and the Plan Administrator if the Plan Administrator is an Executive, the Compensation Committee and (2) with respect to all other Executives, the Plan Administrator.
|
2.3
|
“Base Salary”
means the Executive’s highest annual base salary from SunTrust and any Affiliate which (but for any salary deferral election) is in effect at any time during the one-year period which ends on the date the Executive’s employment with SunTrust or an Affiliate terminates under the circumstances described in Articles 4 and 5.
|
2.4
|
“Board”
means the Board of Directors of SunTrust.
|
2.5
|
“Cause”
means:
|
a.
|
The willful and continued failure by the Executive to perform satisfactorily the duties of the Executive’s job;
|
b.
|
The Executive is convicted of a felony or has engaged in a dishonest act, misappropriation of funds, embezzlement, criminal conduct or common law fraud;
|
c.
|
The Executive has engaged in a material violation of the SunTrust Code of Business Conduct and Ethics or the Code of Conduct of a SunTrust Affiliate; or
|
d.
|
The Executive has engaged in any willful act that materially damages or materially prejudices SunTrust or an Affiliate or has engaged in conduct or activities materially damaging to the property, business or reputation of SunTrust or an Affiliate; provided, however,
|
e.
|
With respect to the Chief Executive Officer and the Plan Administrator if the Plan Administrator is an Executive, no such act, omission or event shall be treated as “Cause” unless (i) the Executive has been provided a detailed, written statement of the basis for SunTrust’s belief that such act, omission or event constitutes “Cause” and, if the allegation is under Section 2.5(a), has had at least a thirty (30) day period to take corrective action and (ii) the Committee, after the end of such thirty (30) day correction period (if applicable), determines reasonably and in good faith and by the affirmative vote of at least two-thirds of the members of the Committee then in office at a meeting called and held for such purpose that “Cause” does exist.
|
f.
|
With respect to all other Executives, no such act, omission or event shall be treated as “Cause” unless (i) the Executive has been provided a detailed, written statement of the basis for SunTrust’s belief that such act, omission or event constitutes “Cause” and, if the allegation is under Section 2.5(a), has had at least a thirty (30) day period to take corrective action and (ii) the Plan Administrator, after the end of such thirty (30) day correction period (if applicable), determines reasonably and in good faith “Cause” does exist.
|
2.6
|
“Change in Control”
means a change in control of SunTrust of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of the then outstanding securities of SunTrust or any successor of SunTrust; (ii) during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) there is a consummation of any reorganization, merger, consolidation or share exchange as a result of which the common stock of SunTrust shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of SunTrust) or any dissolution or liquidation of SunTrust or any sale or the disposition of 50% or more of the assets or business of SunTrust; or (iv) there is a consummation of any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the
|
2.7
|
“Change in Control Agreement”
means a change in control agreement by and between SunTrust and an Executive.
|
2.8
|
“Change in Control Termination”
means an Executive’s Separation from Service due to an involuntary termination of employment without Cause or resignation for Good Reason during an Executive’s Protection Period.
|
2.9
|
“Code”
means the Internal Revenue Code of 1986, as amended.
|
2.10
|
“Committee”
means the Compensation Committee of the Board.
|
2.11
|
“Disability”
means the Executive is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Executive’s employer and, in addition, has begun to receive benefits under SunTrust’s Long-Term Disability Plan.
|
2.12
|
“Effective Date”
means the effective date of this Plan, which is April 22, 2014. The Plan was approved by the Committee on January 9, 2014.
|
2.13
|
“Equivalent Position”
means a job that will not result in a “material negative change” to the existing employment relationship of the Executive with SunTrust or an Affiliate, within the meaning of Treas. Reg. §1.409A-1(n)(2)(i). For purposes of this definition, a job will not result in a material negative change to the Executive when compared to his existing employment relationship if such job meets all of the following requirements:
|
a.
|
It does not require significantly more business-related travel on an ongoing basis than the Executive’s present position. Business-related travel means travel for or on behalf of the Company or an
Affiliate
, which requires the Executive to stay overnight away from the Executive’s residence. Unless the Plan Administrator announces otherwise, an anticipated increase of 33% or more in required business-related travel for the new position is treated as significant provided, however, if the anticipated travel increase for the new position is three (3) or fewer nights per month, this increase will not be considered significant, regardless of the percentage increase
.
|
b.
|
It is at the
same
location, or at a location requiring an additional commute (one-way) of no more than 25 additional miles from the Executive’s current residence to the Executive’s new work location.
|
c.
|
It has an
annual
base salary that is at least 90% of the Executive’s current annual base salary.
|
2.14
|
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
|
2.15
|
“Exchange Act”
means the Securities Exchange Act of 1934, as amended.
|
2.16
|
“Executive”
means, for purposes of the Plan: (1) members of the Executive Leadership Team and (2) all other Enterprise Level Executives not included in (1) above.
|
2.17
|
“
Executive Leadership Team”
m
eans the Chief Executive Officer, all direct reports to the CEO and such other Enterprise Level Executives as designated by the CEO.
|
2.18
|
“FIP”
means a functional incentive plan which provides a short-term bonus or commissions to certain Executives that are not eligible to participate in the AIP.
|
2.19
|
“Good Reason”
means:
|
a.
|
Without the Executive’s express written consent, SunTrust or any Affiliate after a Change in Control but before the end of Executive’s Protection Period:
|
i.
|
reduces the Executive’s base salary or opportunity to receive comparable incentive compensation or bonuses;
|
ii.
|
reduces the scope of the Executive’s principal or primary duties, responsibilities or authority;
|
iii.
|
transfers the Executive’s primary work site from the Executive’s primary work site on the date of such Change in Control or, if the Executive subsequently consents in writing to such a transfer, from the primary work site which was the subject of such consent, to a new primary work site which is outside the “standard metropolitan statistical area” which then includes the Executive’s then-current primary work site unless such new primary work site is closer to the Executive’s primary residence than the Executive’s then-current primary work site; or
|
iv.
|
fails to continue to provide to the Executive health and welfare benefits, deferred compensation and retirement benefits, stock option and restricted stock grants that are in the aggregate comparable to those provided to the Executive immediately prior to the Change in Control.
|
b.
|
Notwithstanding Section 2.19(a), no such act or omission shall be treated as “Good Reason” under the Plan unless:
|
i.
|
(1) With respect to the Chief Executive Officer and the Plan Administrator if the Plan Administrator is an Executive, the Executive delivers to the Committee a detailed, written statement of the basis for the Executive’s belief that such act or omission constitutes Good Reason, (2) the Executive delivers such statement before the later of (A) the end of the ninety (90) day period which starts on the date there is an act or omission which forms the basis for the Executive’s belief that Good Reason exists or (B) the end of the period mutually agreed upon for purposes of this Section 2.19(b)(i)(1) in writing by the Executive and the Chairman of the Committee, (3) the Executive gives the Committee a thirty (30) day period after the delivery of such statement to cure the basis for such belief and (4) the Executive actually submits his or her written resignation to the Committee during the sixty (60) day period which begins immediately after the end of such thirty (30) day period if the Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such thirty (30) day period, or
|
ii.
|
(1) With respect to all other Executives, the Executive delivers to the Plan Administrator a detailed, written statement of the basis for the Executive’s belief that such act or omission constitutes Good Reason, (2) the Executive delivers such statement before the end of the ninety (90) day period which starts on the date there is an act or omission which forms the basis for the Executive’s belief that Good Reason exists, (3) the Executive gives the Plan Administrator a thirty (30) day
|
iii.
|
SunTrust states in writing to the Executive that the Executive has the right to treat such act or omission as Good Reason under the Plan and the Executive resigns during the sixty (60) day period which starts on the date such statement is actually delivered to the Executive;
|
c.
|
If (1) the Executive gives the Committee or the Plan Administrator the statement described in Section 2.18(b)(i)(1) or 2.18(b)(ii)(1) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and the Executive thereafter resigns within the period described in Section 2.18(b)(i) or 2.18(b)(ii), or (2) SunTrust provides the statement to the Executive described in Section 2.18(b)(iii) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and the Executive thereafter resigns within the period described in Section 2.18(b)(iii); then (3) such resignation shall be treated under this Plan as if made in the Executive’s Protection Period; and
|
d.
|
If the Executive consents in writing to any reduction described in Sections 2.18(a)(i) or 2.18(a)(ii), to any transfer described in Section 2.18(a)(iii) or to any failure described in Section 2.18(a)(iv) in lieu of exercising the Executive’s right to resign for Good Reason and delivers such consent to SunTrust, the date such consent is delivered to SunTrust thereafter shall be treated under this definition as the date of a Change in Control for purposes of determining whether the Executive subsequently has Good Reason under this Plan to resign as a result of any subsequent reduction described in Sections 2.18(a)(i) or 2.18(a)(ii), any subsequent transfer described in Section 2.18(a)(iii) or any subsequent failure described in Section 2.18(a)(iv).
|
2.20
|
“Key Employee”
means an employee treated as a “specified employee” (as defined under Code Section 409A(a)(2)(B)(i)) of SunTrust or any Affiliate as of his Separation from Service if SunTrust or any Affiliate’s common stock is publicly traded on an established securities market or otherwise (i.e., a key employee (as defined in Code Section 416(i) without regard to paragraph (5) thereof)). Key Employees shall be determined in accordance with Code Section 409A using a December 31 identification date. A listing of Key Employees as of an identification date shall be effective for the 12-month period beginning on the April 1 following the identification date.
|
2.22
|
“Plan”
means this SunTrust Banks, Inc. Executive Severance Pay Plan as set forth in this document and any related exhibits and attachments and all amendments to this document and any related exhibits and attachments.
|
2.23
|
“Plan Administrator”
means an entity (including an Affiliate), a committee or an individual who is appointed in writing by the Committee to serve as Plan Administrator for the Plan. If there is no such appointment, SunTrust shall serve as the Plan Administrator and its administrative duties are carried out under the direction of SunTrust’s Chief Human Resource Officer.
|
2.24
|
“Plan Year”
means the calendar year.
|
2.25
|
“Protection Period”
means the two (2) year period which begins on a Change in Control.
|
2.26
|
“Qualifying Termination”
means an Executive’s involuntary Separation from Service with SunTrust and all Affiliates, other than during an Executive’s Protection Period, because of a reduction-in-force (RIF); job elimination; consolidation, merger or divestiture; or a job evaluation that results in changes to the Executive’s existing position such that the existing and the new positions are not Equivalent Positions. A Qualifying Termination does not include a termination of an Executive’s employment due to any of the following reasons:
|
a.
|
An involuntary termination of employment for any reason not listed above;
|
b.
|
A voluntary termination of employment by the Executive;
|
c.
|
A voluntary transfer to a position within the SunTrust controlled group;
|
d.
|
An offer of an Equivalent Position by SunTrust or an Affiliate or a transfer to an Equivalent Position with SunTrust or an Affiliate;
|
e.
|
A demotion, transfer or termination resulting from disciplinary action, poor job performance or for Cause;
|
f.
|
A transfer of employment or job reassignment in connection with a sale of assets or stock, or a merger, or other means of acquisition or divestiture of any SunTrust entity or an Affiliate (including but not limited to, an Affiliate, a Company or a division, unit, subsidiary or other part of SunTrust, a Company or an Affiliate);
|
g.
|
A continuation of employment with a SunTrust entity after it ceases to be part of the SunTrust controlled group as a result of a corporate transaction;
|
h.
|
A transfer of employment or job reassignment to an entity outside the SunTrust controlled group in connection with an outsourcing, leasing, subcontracting, secondment, or similar transaction; or
|
i.
|
Acceptance of any position with SunTrust or an Affiliate, regardless of whether such position is an Equivalent Position.
|
2.27
|
“Separation from Service” or “Separates from Service”
means a “separation from service” within the meaning of Code Section 409A.
|
2.28
|
“Severance Amount”
means the applicable lump sum severance payment described in Section 4.2 and 5.2 herein.
|
2.29
|
“SunTrust”
means SunTrust Banks, Inc. and any successor to SunTrust.
|
2.30
|
“Target Bonus Percentage”
means
|
a.
|
If an Executive participates in the AIP at the time of his Separation from Service during the Protection Period, the Target Bonus Percentage means the target bonus percentage determined under the AIP.
|
b.
|
If an Executive was not eligible to participate in the AIP but participates in a FIP at the time of his Separation from Service during the Protection Period, the amount described in this Target Bonus Percentage shall mean the average of the Executive’s payments under the FIP for the three (3) complete Plan Years immediately preceding Separation from Service expressed as a percent of the Executive’s Base Salary.
|
c.
|
In the event an Executive was not eligible to participate in the AIP or any FIP at Separation from Service during the Protection Period, the amount described in this Section 2.29 shall be the average of the Executive’s annual bonus for the three (3) complete Plan Years immediately preceding Separation from Service expressed as a percent of the Executive’s Base Salary.
|
3.1
|
Eligible Executives
. The Executives eligible to participate in the Plan shall be designated by the Plan Administrator. Executives shall be notified in writing of their selection to participate in the Plan. Notwithstanding anything to the contrary, an Executive who is party to Change in Control Agreement will not be eligible for benefits under Article 5 until such Change in Control Agreement expires in accordance with its terms.
|
3.2
|
Revocation of Participation.
The Plan Administrator in its absolute discretion may revoke an Executive’s right to participate in the Plan at any time except as set forth in Section 11.1.
|
3.3
|
Termination of Participation
. An individual’s status as an Executive shall terminate and the Executive shall cease eligibility for benefits under the Plan on the earliest to occur of the following events:
|
a.
|
The date, prior to a Change in Control, on which the Executive separates from service with a Company for any reason that is not a Qualifying Termination or the Executive otherwise loses eligibility status (e.g., transfer to an ineligible job classification);
|
b.
|
The date after a Change in Control on which the Executive separates from Service due to Termination for Cause or voluntary termination other than for Good Reason;
|
c.
|
The date the Plan Administrator revokes the Executive’s right to participate in the Plan pursuant to Section 3.2 above; or
|
d.
|
The date on which the Plan terminates or the effective date of a Plan amendment that excludes the Executive from eligibility.
|
4.1
|
Eligibility for Benefits
. If an Executive has a Qualifying Termination and satisfies all of the following requirements through the date of his Qualifying Termination, SunTrust shall pay or provide to the Executive the payments and benefits set forth in this Article 4.
|
a.
|
The Executive must continue working through the date designated as his Qualifying Termination date. With the consent of the Plan Administrator, the Executive’s manager may, in his or her discretion, decide that the Executive has performed all transitional and other duties required and may release the Executive early from the obligation to perform further duties through the date of his scheduled Qualifying Termination.
|
b.
|
The Executive must continue to perform all responsibilities assigned to him at a satisfactory level including maintaining at least a 2 In Balance rating as determined by the Plan Administrator through his termination date (or his release date, if earlier).
|
c.
|
The Executive must conduct himself in a manner consistent with the high standards expected of all SunTrust employees and in accordance with the SunTrust Code of Business Conduct and Ethics.
|
d.
|
The Executive must not decline an offer of an Equivalent Position with a Company, prior to the Executive’s designated Qualifying Termination date, even if his or her manager has released the Executive earlier than such designated date.
|
4.2
|
Determination of Severance Amount
. The Severance Amount payable in accordance with this Article 4 is an amount equal to the following:
|
a.
|
With respect to the Chief Executive Officer, an amount equal to one-hundred and four (104) weeks of Base Salary.
|
b.
|
With respect to the Executive Leadership Team (excluding the Chief Executive Officer), an amount equal to seventy-eight (78) weeks of Base Salary.
|
c.
|
With respect to Other Enterprise Level Executives, an amount equal to fifty-two (52) weeks of Base Salary.
|
4.3
|
Repayment
. If an Executive receives a benefit under this Plan and is subsequently rehired by SunTrust or an Affiliate, the Executive will be required to repay any severance amount corresponding to the period from the date of rehire to the end of the period for which the Executive was paid the Severance Amount.
|
4.4
|
Manner of Payment
.
|
a.
|
Form and Timing
. The Severance Amount described in Section 4.2 shall be paid in cash to the Executive in a single lump sum sixty (60) days after the Executive’s Separation from Service. Notwithstanding the foregoing, if the Executive is a Key Employee, the Severance Amount shall be paid in a lump sum on the first day of the seventh month following the date on which the Executive Separates from Service (or, if earlier, the first day of the month after the Executive’s death) (the period of delay prior to payment shall be referred to hereafter as the
“Key Employee Delay”
). During the Key Employee Delay, interest shall accrue on the Severance Amount at the “prime rate” as reported by SunTrust Bank or its successor on the date the Executive Separates from Service or, if such rate is not reported on such date, such rate as so reported on the last business day before the Executive’s Separation from Service.
|
b.
|
Earned but Unpaid Salary, Bonus and Vacation
. SunTrust shall promptly pay the Executive any earned but unpaid base salary and bonus, shall promptly pay the Executive for any earned but untaken vacation and shall promptly reimburse the Executive for any incurred but unreimbursed expenses which are otherwise reimbursable under SunTrust’s expense reimbursement policy as in effect for senior executives immediately before the Executive’s employment so terminates.
|
c.
|
Other Benefits
. Any other employee benefits or incentive compensation plans for which an Executive is eligible will be provided in accordance with the terms of the applicable employee benefit or incentive compensation plan. In addition, the Plan Administrator may offer reasonable outplacement services to any Executive who is determined to be eligible for severance pay under this Plan, at the level and for the period determined by the Plan Administrator, to assist the Executive in his or her new job search. In no event, however, shall expenses related to such outplacement services be incurred beyond the last day of the second year following the year in which the Separation from Service occurs and such expenses must be paid/reimbursed on or before the end of the third year following the year in which the Separation from Service occurs.
|
5.1
|
Eligibility for Benefits
. Except as set forth in Section 5.5 below), if an Executive has a Change in Control Termination, SunTrust shall pay or provide to the Executive the payments and benefits set forth in this Article 5.
|
5.2
|
Determination of Severance Amount
. The Severance Amount payable in accordance with this Article 5 is an amount equal to the following:
|
a.
|
With respect to the Chief Executive Officer, an amount equal to one-hundred and four (104) weeks of Base Salary plus an amount equal to two (2) times the Executive’s Target Bonus Percentage multiplied by Base Salary.
|
b.
|
With respect to the Executive Leadership Team (excluding the Chief Executive Officer), an amount equal to one-hundred and four (104) weeks of Base Salary plus an amount equal to two (2) times the Executive’s Target Bonus Percentage multiplied by Base Salary.
|
c.
|
With respect to Other Enterprise Level Executives, an amount equal to fifty-two (52) weeks of Base Salary plus an amount equal to one (1) times the Executive’s Target Bonus Percentage multiplied by Base Salary.
|
5.3
|
Manner of Payment
.
|
a.
|
Form and Timing
. The Severance Amount described in Section 5.2 shall be paid in cash to the Executive in a single lump sum sixty (60) days after the Executive’s Separation from Service. Notwithstanding the foregoing, if the Executive is a Key Employee, the Severance Amount shall be paid in a lump sum on the first day of the month following Key Employee Delay. During the Key Employee Delay, interest shall accrue on the Severance Amount at the “prime rate” as reported by SunTrust Bank or its successor on the date the Executive Separates from Service or, if such rate is not reported on such date, such rate as so reported on the last business day before the Executive’s Separation from Service.
|
b.
|
Earned but Unpaid Salary, Bonus and Vacation
. SunTrust shall promptly pay the Executive any earned but unpaid base salary and bonus, shall promptly pay the Executive for any earned but untaken vacation and shall promptly reimburse the Executive for any incurred but unreimbursed expenses which are otherwise reimbursable under SunTrust’s expense reimbursement policy as in effect for senior executives immediately before the Executive’s termination of employment.
|
c.
|
Other Benefits
.
|
i.
|
Stock Options
. Notwithstanding the terms of any plan or agreement under which an option was granted, each outstanding stock option granted to the Executive by SunTrust shall immediately become fully vested and exercisable on the date of the Executive’s termination of employment. For purposes of determining when the Executive’s right to exercise each such option expires, the Executive shall be deemed to continue to be employed by SunTrust for the number of weeks of Base Salary the Executive is eligible to receive under Section 5.2; provided, however, in no event shall the Executive’s right to exercise the option extend beyond the earlier of (i) the latest date upon which the option could have expired by its original terms under any circumstances; or (ii) the tenth (10
th
) anniversary of the original date of grant.
|
ii.
|
Restricted Stock and Restricted Stock Units
. Restrictions on any outstanding restricted stock grants or restricted stock unit awards, if any, to the Executive by SunTrust shall immediately expire and the Executive’s right to such stock or stock units shall be non-forfeitable in accordance with the Change in Control provisions of the agreement under which such grants or awards were made.
|
iii.
|
Performance Stock and Performance Stock Units
. Outstanding performance stock grants or performance stock unit awards, if any, to the Executive by SunTrust shall vest in accordance with the Change in Control provisions of the agreement under which such grants or awards were made.
|
iv.
|
Bonus Award
. Payments under this Section 5.3(c)(iv) shall reduce any amounts otherwise payable pursuant to the terms of the AIP or FIP, as applicable, at the end of the calendar year in which the Executive terminates employment. Notwithstanding anything herein to the contrary, any portion of the amounts set forth below that have been elected or scheduled to be deferred and credited under the SunTrust Banks, Inc. Deferred Compensation Plan or any other nonqualified plan maintained by SunTrust or an Affiliate shall not be paid under this Section 5.3(c)(iv).
|
(A)
|
AIP
. If the Executive participates in the AIP, SunTrust shall pay the Executive sixty (60) days after the Executive’s Separation from Service, a portion of the Executive’s target bonus or, if greater, the Executive’s projected bonus under the AIP for the calendar year in which the Executive’s
|
(B)
|
FIP
. If the Executive was not eligible to participate in the AIP, but participates in a FIP, SunTrust shall pay the Executive sixty (60) days after the Executive’s Separation From Service an amount equal to the average of the Executive’s payments under the FIP for the three (3) complete Plan Years immediately preceding Separation from Service, multiplied by a fraction, the numerator of which shall be the number of days the Executive is employed in such calendar year and the denominator of which shall be the number of days in such calendar year.
|
5.4
|
Termination in Anticipation of Change in Control
. The Executive shall be treated under Section 5.1 as if the Executive’s employment had been terminated without Cause or the Executive had resigned for Good Reason during the Executive’s Protection Period if (1)(A) the Executive’s employment is terminated by SunTrust or an Affiliate without Cause on or after the date the shareholders of SunTrust approve any transaction described in Section 2.6(iii) or Section 2.6(iv) but before the Change in Control which results from such approval, or (B) the Executive resigns for Good Reason on or after the date the shareholders of SunTrust approve any transaction described in Section 2.6(iii) or Section 2.6(iv) but before the Change in Control which results from such approval; and (2) there is a Change in Control which results from such shareholder approval. The Executive shall receive the Severance Amount described in Section 5.2 in a single lump sum following the later of: (x) the Executive’s Separation from Service (with payment in accordance with Section 5.3(a), or (y) the date of the Change in Control. If the date of the Change in Control is the later event, payment shall be treated as made upon the lapse of a substantial risk of forfeiture under Treas. Reg. § 1.409A-3(i)(1)(i) and treated as paid on the date of such Change in Control.
|
5.5
|
Change in Control Agreements/No Duplication of Benefits
. An Executive who is a party to a Change in Control Agreement shall not be eligible for any Severance Amount or other benefits or payments under this Article 5 until the Change in Control Agreement expires in accordance with its terms.
|
5.6
|
Limitation on Payments under Certain Circumstances
. If SunTrust or SunTrust’s independent accountants determine that any payments and benefits called for under this Plan, solely because of a Change in Control, together with any other payments and benefits made available to the Executive by SunTrust or an Affiliate (each, a “Payment”) will result in any portion of such Payments being subject to an excise tax under Code Section 4999 or any like or successor section thereto (the “Excise Tax”), then the Payments shall be reduced (but not below zero) so that the amount of the Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Payments to be subject to the Excise Tax (the “Reduced Amount”); provided that such Payments shall not be reduced if, without such reduction, the Executive would receive and retain, on a net after-tax basis (taking into account all applicable taxes payable by Executive, including any Excise Tax), an amount of the Payments which is greater than the amount, on a net after-tax basis, that the Executive would be entitled to retain upon receipt of the Reduced Amount.
|
6.1
|
Restrictive Covenant Agreement
.
As a condition of becoming a participant and receiving any payments or benefits under the Plan, each Executive will be required to provide a written acknowledgement of his participation in the Plan and shall be subject to the covenants described in this Section 6.1.
|
a.
|
No Solicitation of Customers or Clients
. The Executive shall not during the Restricted Period, directly or indirectly, for himself or on behalf of any Business Entity other than SunTrust or an Affiliate, solicit or attempt to solicit any Customer for the purpose of marketing, providing, servicing, or selling, any product or service then marketed, provided, serviced, or sold by SunTrust or any Affiliate in any line of business in connection with which Executive had Material Contact with such Customer. Nothing contained in this Section 6.1(a) will prohibit public advertising or public solicitations (such as television advertisements directed to the general public) of Customers, potential customers or clients of SunTrust or any Affiliate in general so long as the advertising and solicitations are not specifically directed to Customers, potential customers or clients of SunTrust or any Affiliate.
|
b.
|
Anti-pirating of Employees
. Absent the Plan Administrator’s written consent, an Executive will not during the Restricted Period solicit to employ on the Executive’s own behalf or on behalf of any other person, firm or corporation, any person who was employed by SunTrust or an Affiliate during the term of the Executive’s employment by SunTrust or an Affiliate (whether or not such employee would commit a breach of contract), and who has not ceased to be employed by SunTrust or an Affiliate for a period of at least one (1) year. Nothing contained in this Section 3 will prohibit public advertising or public solicitations (such as want-ads directed to the general public) of any person employed during such period by SunTrust or an Affiliate in general so long as the advertising and solicitations are not specifically directed to any employee or former employee of SunTrust or an Affiliate.
|
c.
|
Trade Secrets and Confidential Information
. By participating in this Plan, the Executive agrees that:
|
i.
|
the Executive will hold in a fiduciary capacity for the benefit of SunTrust and each Affiliate, and will not directly or indirectly use or disclose, any Trade Secret that Executive may have acquired during the term of the Executive’s employment by SunTrust or an Affiliate for so long as such information remains a Trade Secret; and
|
ii.
|
during the Restricted Period, the Executive will hold in a fiduciary capacity for the benefit of SunTrust and each Affiliate, and will not directly or indirectly use or disclose, any Confidential or Proprietary Information that the Executive may have acquired (whether or not developed or compiled by the Executive and whether or not the Executive was authorized to have access to such information) during the term of, in the course of, or as a result of the Executive’s employment by SunTrust or an Affiliate.
|
d.
|
Definitions
|
i.
|
“Business Entity”
means any individual, partnership, association, corporation, trust, limited liability company, unincorporated organization, or any other business entity or enterprise.
|
ii.
|
“Confidential or Proprietary Information”
means any secret, confidential, or proprietary information of SunTrust or a SunTrust Affiliate (not otherwise included in the definition of Trade Secret below) that has not become generally available to the public by the act of one who has the right to disclose such information without violating any right of SunTrust or an Affiliate.
|
iii.
|
“Customer”
means any Business Entity to whom SunTrust or any SunTrust Affiliate provides any product or service, and with whom the Executive had Material Contact.
|
iv.
|
“Material Contact”
means any interaction between the Executive and any Business Entity that takes place in an effort to establish, maintain, or further a business relationship on behalf of SunTrust or any SunTrust Affiliate.
|
v.
|
“
Restricted Period”
means the period during which Executive is employed by SunTrust or any Affiliate and the two year period following Executive’s termination of employment, regardless of the reason for the termination.
|
vi.
|
“Trade Secret”
means information, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers that:
|
(A)
|
derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by
|
(B)
|
is the subject of reasonable efforts by SunTrust or an Affiliate to maintain its secrecy.
|
e.
|
Reasonable and Necessary Restrictions.
The Executive acknowledges that the restrictions, prohibitions and other provisions set forth in these Restrictive Covenants, including without limitation the Restricted Period, are reasonable, fair and equitable in scope, terms and duration; are necessary to protect the legitimate business interests of SunTrust; and are a material inducement to SunTrust to provide the benefits under the Plan. The Executive covenants that he will not challenge the enforceability of this these Restrictive Covenants nor will he raise any equitable defense to its enforcement. If any provision of these Restrictive Covenants ever is deemed to be unenforceable or to exceed the time, scope, or geographic limitations permitted by applicable law, then such provision(s) shall be reformed to the maximum limitations permitted by law. If any such provision(s) cannot be so reformed, then such provision shall be severed from the other Restrictive Covenants and shall not adversely affect the legality, validity, or enforceability of any of the remaining provisions.
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6.2
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Release
. As a condition of payment under the Plan, the Executive must sign a release, satisfactory to the Plan Administrator, waiving all rights to file any claim against SunTrust, any Affiliate, directors, officers, employees, or agents relating to the Executive’s employment or separation from service or against the Plan and its fiduciaries and agreeing to such confidentiality provisions and such other restrictions as the Committee deems appropriate.
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6.4
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Taxes
. All required federal, state and local taxes will be withheld from the cash lump sum severance payment. In addition, any financial obligations the Executive has to SunTrust or an Affiliate will be deducted from the lump sum severance payment.
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6.5
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No Increase in Other Benefits; No Other Severance Pay
. Severance Amounts payable under Article 4 or Article 5 shall not be taken into account to increase the benefits otherwise payable to, or on behalf of, the Executive under any employee benefit plan,
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6.6
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No Severance Pay upon Death or Disability
. SunTrust will have no obligations to the Executive under this Plan if the Executive’s employment terminates exclusively as a result of the Executive’s death or the Executive is no longer actively at work due to Disability.
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8.1
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Claims
. All claims for benefits under this Plan shall be made, reviewed, processed, paid or denied and appealed in accordance with the terms and conditions of the provisions of the claims procedures as set forth in the Plan’s summary plan description. Before an Executive or his representative files a lawsuit claiming benefits under this Plan, the Executive must exhaust his right under the Plan’s claim procedures, and all or part of the Executive’s claim must be initially denied and then denied on appeal. Notwithstanding any other provision of the Plan or the summary plan description to the contrary, all claims for payment of severance benefits under this Plan must be filed with the Plan Administrator within 12 months after the earlier of the date the Executive separates from service or the date of the event that the Executive claims is the triggering event that gives rise to his entitlement to severance benefits under this Plan. Any such claim submitted after the applicable 12-month period will not be considered for payment under this Plan. If an Executive wishes to bring a lawsuit related to a claim for benefits under this Plan, the lawsuit must be filed no later than 24 months after the date on which such Executive’s claim is denied on appeal. In the event an Executive is incapacitated, the Executive’s personal representative may file a claim on the Executive’s behalf as long as it is filed within a reasonable time after the end of the applicable 12-month period for filing claims. The preceding restrictions on the time for filing claims under the Plan’s claims procedures and the time for filing a lawsuit shall not apply to any claim for breach of fiduciary duty, which shall be governed by the time periods set forth in ERISA section 413.
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8.2
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No Estoppel of Plan
. No person is entitled to any benefit under this Plan except and to the extent expressly provided under this Plan. The fact that payments have been made from this Plan in connection with any claim for benefits under this Plan does not (i) establish the validity of the claim, (ii) provide any right to have such benefits continue for any period of time, or (iii) prevent this Plan from recovering the benefits paid to the extent that SunTrust or the Plan Administrator determines that there was no right to payment of the benefits under this Plan. Thus, if a benefit is paid under this Plan and it is thereafter determined by SunTrust or the Plan Administrator that such benefit should not have been paid (whether or not attributable to an error by the Executive, SunTrust, the Plan Administrator, or any other person), then SunTrust or the Plan Administrator may take such action as SunTrust or the Plan Administrator deems necessary or appropriate under the circumstances, including without limitation, (i) deducting the amount of any such overpayment theretofore made to or on behalf of such Executive from any succeeding payments to or on behalf of such Executive under this Plan or from any amounts due or owing to such Executive by SunTrust or any Affiliate or under any other plan, program or arrangement benefiting the employees or former employees of SunTrust or any Affiliate, or (ii) otherwise recovering such overpayment from whoever has benefited from it.
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8.3
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If SunTrust or the Plan Administrator determines that an underpayment of benefits has been made, SunTrust or the Plan Administrator shall take such action as it deems necessary or appropriate under the circumstances to remedy such situation. However, in no event shall interest be paid on the amount of any underpayment.
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9.1
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Administration
. The Plan Administrator is the named fiduciary of the Plan. The Plan Administrator may appoint, as it deems necessary or advisable, an individual or committee to act as its representative in matters affecting the Plan. The Plan Administrator shall have authority to control and manage the operation and administration of the Plan in good faith, and may adopt rules and regulations consistent with the terms of the Plan and necessary or advisable to administer the Plan properly and efficiently.
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9.2
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Discretionary Authority
. The Plan Administrator shall have the exclusive responsibility and complete discretionary authority to control the operation and administration of the Plan, with all powers necessary to enable it to properly carry out its responsibilities under the Plan, including, but not limited to, the power to define and construe the terms of this Plan, to determine status, coverage and eligibility for benefits, to resolve all interpretative, equitable and other questions that arise in the operation and administration of this Plan, to adopt and implement rules to carry out the administration of the Plan, and to settle any and all disputed claims that may arise. The grant of such sole and complete discretionary authority to the Plan Administrator in the exercise of all its powers and duties is intended to invoke the arbitrary-and-capricious standard of review as opposed to the de novo standard.
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9.3
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Designees
. The Plan Administrator may delegate all or any portion of its authority under the Plan to any other person(s). Any other person designated as named fiduciary or a Plan Administrator
designated as responsible for a particular aspect of the control, management or administration of this Plan shall have the exclusive responsibility and complete discretionary authority to control those aspects of the operation and administration of the Plan with respect to which such designation is made, including, but not limited to, the power to determine benefits payable, to resolve all interpretative equitable and other questions that shall arise in the operation and administration of the particular aspect of the Plan over which such person has such discretionary authority, and to settle any and all disputed claims that may arise with respect to such aspect of the Plan.
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9.4
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Service as Fiduciary
. A person may serve in more than one fiduciary capacity (as defined in ERISA) with respect to this Plan, and a fiduciary may be an Executive provided such person otherwise satisfies the requirements for participation under this Plan and he or she does not participate in any decisions that affect him or her specifically as an individual executive. All actions or determinations of SunTrust, the Committee, any person designated as a named fiduciary or a Plan Administrator on all matters within the scope of their authority under this Plan shall be final, conclusive
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11.1
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Amendment
. Except as set forth in Section 11.3 below, SunTrust reserves the right, through action of the Committee at any time and from time to time, to amend this Plan in any respect whatsoever. An amendment may be made retroactively but a retroactive amendment may not affect any benefits for which an Executive is entitled due to a Qualifying Termination or a Change in Control Termination prior to the adoption of such amendment. An amendment may affect the payment of benefits under the Plan if necessary to cause the Plan to meet the applicable qualification requirements of the Code or ERISA.
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11.2
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Termination
. Except as set forth in Section 11.3 below, SunTrust, through action of the Committee, reserves the right at any time to terminate the Plan. After such termination, SunTrust and the Affiliates shall have no obligation or duty whatsoever to pay or to fund benefits or to pay expenses of this Plan except for those expenses of this Plan accrued through the date of such termination.
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11.4
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Compliance with Laws
. Notwithstanding any other provision of the Plan or the summary plan description, SunTrust, through action of the Plan Administrator, may delay any benefit payment under the Plan and may refuse to pay any benefit otherwise due under the Plan, if the Plan Administrator, in its sole discretion, believes that any such payment may violate any law, ruling or regulation that applies to SunTrust or any of its Affiliates or any Executive. To the extent applicable, the Plan is intended to comply with Code Section 409A and official guidance issued thereunder and shall be interpreted, operated and administered in a manner consistent with this intention.
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12.1
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Spendthrift Clause
. Except to the extent permitted by law, no benefit, payment or distribution under this Plan shall be subject to the claim of any creditor of an Executive or to any legal process by any creditor of an Executive, and no Executive shall have any right to alienate, commute, anticipate, or assign all or any portion of any benefit, payment or distribution under this Plan except to the extent expressly provided in this Plan. Notwithstanding the foregoing, this Section 12.1 shall not preclude the enforcement of a federal tax levy made pursuant to Code Section 6331 or the collection of an unpaid tax judgment. SunTrust and its Affiliates shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits under this Plan.
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12.2
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Legally Incompetent
. SunTrust may in its discretion direct payment due to an incompetent or disabled person, whether because of minority or mental or physical disability, or to the guardian of such person, or to the person having custody of such person, without further liability either on the part of SunTrust and its Affiliates, their officers, directors, employees or agents for the amount of such payment to the person on whose account such payment is made.
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12.3
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Reporting and Disclosure
. SunTrust, acting through the corporate benefits area, shall act as the Plan Administrator for purposes of satisfying any reporting and disclosure requirements applicable to this Plan unless SunTrust, in its discretion, appoints another person or entity to satisfy such requirements.
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12.4
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Plan Not an Employment Contract
. This Plan is not a contract of employment and participation in this Plan shall not give any Executive the right to be retained in the employ of SunTrust or any Affiliate.
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12.5
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Errors and Omissions
. Individuals and entities charged with the administration of the Plan must see that it is administered in accordance with its terms as long as it is not in conflict with any other particular provision of applicable law with which it is intended to comply. If an innocent error or omission is discovered in the Plan’s operation or administration, and if SunTrust determines that it would cost more to correct the error than is warranted, and if SunTrust determines that the error did not result in discrimination prohibited by this Plan, then, to the extent that an adjustment will not, in SunTrust’s judgment, result in discrimination prohibited by the Plan, SunTrust may authorize any equitable adjustment it deems necessary or desirable to correct the error or omission.
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12.6
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Nonvested Benefits
. Nothing in this Plan shall be construed as creating any vested rights to benefits in favor of any Executive.
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12.7
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Construction
. The headings and subheadings in this Plan have been set forth for convenience of reference only and have no substantive effect whatsoever. Unless the context clearly indicates otherwise, references to the singular shall include the plural, references to the plural shall include the singular, references to the masculine gender shall include the feminine and references to any section shall be to a section in this Plan unless otherwise indicated. This Plan shall be construed, enforced and administered in accordance with the laws of the State of Georgia (excluding its choice-of-law rules) to the extent that such laws are not preempted by federal law.
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(1)
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I have reviewed this quarterly report on Form 10-Q of SunTrust Banks, Inc.;
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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(1)
|
I have reviewed this quarterly report on Form 10-Q of SunTrust Banks, Inc.;
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(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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