STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 118 NOTE 10 – GOODWILLAND OTHER INTANGIBLE ASSETS Goodwill The Company conducts a qualitative goodwill assessment at the reporting unit level at least quarterly, ormore frequently as events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. See Note 1, “Significant Accounting Policies,” for additional information regarding the Company’s goodwill accounting policy. The Company performed a qualitative goodwill assessment for the Consumer and Wholesale reporting units as of October 1, 2018, and concluded that a quantitative goodwill impairment test was not necessary for either reporting unit as it was not more- likely-than-not that the fair value of either reporting unit was below its respective carrying amount. The Company performed quantitative goodwill impairment tests for the Consumer and Wholesale reporting units as of October 1, 2017 and 2016. Based on the results of the impairment tests, the Company concluded that the fair values of the reporting units exceed their respective carrying amounts; therefore, there was no goodwill impairment. The Company monitored events and circumstances during the fourth quarter of 2018 and did not observe any factors that would more-likely-than-not reduce the fair value of a reporting unit below its respective carrying amount. In the second quarter of 2018, certain business banking clients were transferred from the Wholesale segment to the Consumer segment, resulting in the reallocation of $128 million in goodwill. See Note 22, “Business Segment Reporting,” for additional information. Changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2018 and 2017 are presented in the following table. (Dollars in millions) Consumer Wholesale Total Balance, January 1, 2018 $4,262 $2,069 $6,331 Reallocation related to intersegment transfer of business banking clients 128 (128) — Balance, December 31, 2018 $4,390 $1,941 $6,331 Balance, January 1, 2017 $4,262 $2,075 $6,337 Measurement period adjustment related to the acquisition of Pillar — 1 1 Sale of PAC — (7) (7) Balance, December 31, 2017 $4,262 $2,069 $6,331 Other Intangible Assets Changes in the carrying amount of other intangible assets are presented in the following table: (Dollars in millions) Residential MSRs - Fair Value Commercial Mortgage Servicing Rights and Other Total Balance, January 1, 2018 $1,710 $81 $1,791 Amortization 1 — (18) (18) Servicing rights originated 336 16 352 Servicing rights purchased 89 — 89 Changes in fair value: Due to changes in inputs and assumptions 2 90 — 90 Other changes in fair value 3 (239) — (239) Servicing rights sold (3) — (3) Balance, December 31, 2018 $1,983 $79 $2,062 Balance, January 1, 2017 $1,572 $85 $1,657 Amortization 1 — (20) (20) Servicing rights originated 394 17 411 Changes in fair value: Due to changes in inputs and assumptions 2 (22) — (22) Other changes in fair value 3 (226) — (226) Servicing rights sold (8) — (8) Other 4 — (1) (1) Balance, December 31, 2017 $1,710 $81 $1,791 1 Does not include expense associated with community development investments. See Note 12, “Certain Transfers of Financial Assets and Variable Interest Entities,” for additional information. 2 Primarily reflects changes in option adjusted spreads and prepayment speed assumptions, due to changes in interest rates. 3 Represents changes due to the collection of expected cash flows, net of accretion due to the passage of time. 4 Represents measurement period adjustment on other intangible assets acquired previously in the Pillar acquisition.