STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 100 NOTE 3 - ACQUISITIONS/DISPOSITIONS During the years ended December 31, 2018, 2017, and 2016, the Company had the following notable acquisition and disposition: (Dollars in millions) Date Consideration Received/(Paid) Goodwill Other Intangible Assets Pre-tax Gain 2017 Sale of PAC 12/1/2017 $261 ($7) $— $107 2016 Acquisition of Pillar 12/15/2016 ($197) $1 $13 1 $— 1 Does not include $62 million of commercial mortgage servicing rights acquired. Sale of PAC In 2017, the Company completed the sale of PAC, its commercial lines insurance premium finance subsidiary with $1.3 billion in assets and $1.2 billion in liabilities, to IPFS Corporation. As a result, the Company received consideration of $261 million and recognized a pre-tax gain of $107 million in connection with the sale, net of transaction-related expenses. The Company's results for the years ended December 31, 2017 and 2016 included the following related to PAC, excluding the gain on sale: (Dollars in millions) PAC Financial Information: 2017 2016 Revenue $56 $60 Less: Expenses 31 27 Income before provision for income taxes $25 $33 The financial results of PAC through the date of disposition, including the gain on sale, are reflected in the Company's Wholesale business segment for the years ended December 31, 2017 and 2016. Acquisition of Pillar In 2016, the Company completed the acquisition of substantially all of the assets of the operating subsidiaries of Pillar Financial, LLC, amulti-family agency lending and servicing companywith an originate-to-distribute focus that holds licenses with Fannie Mae, Freddie Mac, and the FHA. The acquired assets include Pillar's multi-family lending business, which is comprised of multi-family affordable housing, health care properties, senior housing, and manufactured housing specialty teams. Additionally, the transaction includes Cohen Financial's commercial real estate investor services business, which provides loan administration, advisory, and commercial mortgage brokerage services. During the second quarter of 2017, the final settlement amount associated with working capital adjustments was reached and the purchase consideration of $197 million was finalized. There were no other material acquisitions or dispositions during the three years ended December 31, 2018. NOTE 4 - FEDERAL FUNDS SOLD AND SECURITIES FINANCING ACTIVITIES Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell Fed Funds sold and securities borrowed or purchased under agreements to resell were as follows: (Dollars in millions) December 31, 2018 December 31, 2017 Fed funds sold $42 $65 Securities borrowed 394 298 Securities purchased under agreements to resell 1,243 1,175 Total Fed funds sold and securities borrowed or purchased under agreements to resell $1,679 $1,538 Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which the securities will be subsequently resold, plus accrued interest. Securities borrowed are primarily collateralized by corporate securities. The Company borrows securities and purchases securities under agreements to resell as part of its securities financing activities. On the acquisition date of these securities, the Company and the related counterparty agree on the amount of collateral required to secure the principal amount loaned under these arrangements. The Company monitors collateral values daily and calls for additional collateral to be provided as warranted under the respective agreements.At December 31, 2018 and 2017, the total market value of collateral held was $1.6 billion and $1.5 billion, of which $108 million and $177 million was repledged, respectively.