STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 121 NOTE 11 - OTHER ASSETS The components of other assets are presented in the following table: (Dollars in millions) December 31, 2018 December 31, 2017 Equity securities 1 : Marketable equity securities 2 : Mutual fund investments $79 $49 Other equity 3 16 7 Nonmarketable equity securities: Federal Reserve Bank stock 2 403 403 FHLB stock 2 227 15 Other equity 3 68 26 Lease assets 1,940 1,528 Tax credit investments 4 1,722 1,272 Bank-owned life insurance 1,627 1,411 Accrued income 1,106 880 Accounts receivable 602 2,201 Pension assets, net 484 464 Prepaid expenses 231 319 OREO 54 57 Other 5 432 467 Total other assets $8,991 $9,099 1 Does not include equity securities held for trading purposes classified as Trading assets and derivative instruments or Trading liabilities and derivative instruments on the Company’s Consolidated Balance Sheets. See Note 5, “Trading Assets and Liabilities and Derivative Instruments,” for more information. 2 Beginning January 1, 2018, the Company reclassified equity securities previously presented in Securities AFS to Other assets on the Consolidated Balance Sheets. Prior periods have been revised to conform to the current presentation for comparability. 3 During the second quarter of 2018, the Company reclassified $22 million of equity securities from nonmarketable to marketable equity securities due to readily determinable fair value information observed in active markets. 4 See Note 12, “Certain Transfers of Financial Assets and Variable Interest Entities,” for additional information. 5 Beginning October 1, 2018, the Company reclassified capitalized software and related accumulated amortization previously presented inOther assets to Premises, property, and equipment, net, on the Consolidated Balance Sheets. Prior periods have been revised to conform to the current presentation for comparability. Equity Securities Not Classified as TradingAssets or Liabilities Equity securities with readily determinable fair values (marketable) that are not held for trading purposes are recorded at fair value and include mutual fund investments and other publicly traded equity securities. Equity securities without readily determinable fair values (nonmarketable) that are not held for trading purposes include Federal Reserve Bank of Atlanta and FHLB of Atlanta capital stock, both held at cost, as well as other equity securities that the Company elected to account for under the measurement alternative, pursuant to the adoption of ASU 2016-01 on January 1, 2018. See the “Equity Securities” and “Accounting Pronouncements” sections of Note 1, “Significant Accounting Policies,” for additional information on the Company’s adoption ofASU2016-01 and for theCompany's accounting policy related to equity securities. The following table summarizes net gains/(losses) for equity securities not classified as trading assets: (Dollars in millions) Year Ended December 31, 2018 Net (losses)/gains from marketable equity securities 1 ($2) Net gains/(losses) from nonmarketable equity securities: Remeasurement losses and impairment — Remeasurement gains 1 30 Less: Net realized gains from sale — Total net unrealized gains from non-trading equity securities $28 1 Recognized in Other noninterest income in the Company's Consolidated Statements of Income. Lease Assets Lease assets consist primarily of operating leases in which the Company is the lessor. In these scenarios, the Company leases assets and receives periodic rental payments. Depreciation on the leased asset is recognized over the termof the operating lease. Any impairment on the leased asset is recognized to the extent that the carrying value of the asset is not recoverable and is greater than its fair value. Bank-Owned Life Insurance Bank-owned life insurance consists of life insurance policies held on certain employees for which the Company is the beneficiary. These policies provide the Company an efficient formof funding for retirement and other employee benefits costs. Accrued Income Accrued income consists primarily of interest and other income accrued on the Company’s LHFI. Interest income on loans, except those classified as nonaccrual, is accrued based upon the outstanding principal amounts using the effective yield method. See Note 1, “Significant Accounting Policies,” for information regarding the Company’s accounting policy for loans. Accounts Receivable Accounts receivable consists primarily of receivables from brokers, dealers, and customers related to pending loan trades, unsettled trades of securities, loan-related advances, and investment securities income due but not received. Accounts receivable also includes proceeds due from the FHA and the VA on foreclosed real estate related to loans that are insured by the FHA or guaranteed by the VA. Pension Assets Pension assets (net) represent the funded status of the Company’s overfunded pension and other postretirement benefits plans, measured as the difference between the fair value of plan assets and the benefit obligation at period end.