STI 2018 Annual Report

34 Analysis of Changes in Net Interest Income 1 Table 2 2018 Compared to 2017 2017 Compared to 2016 (Dollars in millions) Volume Rate Net Volume Rate Net (Decrease)/Increase in Interest Income: LHFI: C&I ($26) $315 $289 $— $138 $138 CRE 35 40 75 (20) 28 8 Commercial construction (25) 35 10 40 14 54 Residential mortgages - guaranteed — 1 1 (1) (3) (4) Residential mortgages - nonguaranteed 39 16 55 32 7 39 Residential home equity products (53) 61 8 (54) 40 (14) Residential construction (6) 1 (5) (2) — (2) Consumer student - guaranteed 18 38 56 39 23 62 Consumer other direct 67 42 109 66 27 93 Consumer indirect 15 38 53 27 9 36 Consumer credit cards 14 21 35 24 1 25 Nonaccrual (1) (12) (13) (3) 14 11 Securities AFS: 2 Taxable 22 65 87 60 53 113 Tax-exempt 6 — 6 7 — 7 Fed funds sold and securities borrowed or purchased under agreements to resell 2 14 16 — 8 8 LHFS (19) 21 2 (3) 10 7 Interest earning trading assets (9) 41 32 (6) 31 25 Other earning assets 2 (1) 3 2 — 3 3 Total increase in interest income 78 740 818 206 403 609 Increase/(Decrease) in Interest Expense: NOW accounts 4 106 110 5 71 76 Money market accounts (11) 122 111 — 50 50 Savings — — — — (1) (1) Consumer time 6 16 22 (2) 1 (1) Other time 38 25 63 13 5 18 Brokered time deposits 1 2 3 — — — Foreign deposits (4) 2 (2) 2 1 3 Funds purchased 2 12 14 1 8 9 Securities sold under agreements to repurchase 1 15 16 — 8 8 Interest-bearing trading liabilities 9 5 14 (2) 4 2 Other short-term borrowings 4 22 26 1 4 5 Long-term debt 38 49 87 8 20 28 Total increase in interest expense 88 376 464 26 171 197 (Decrease)/Increase in Net Interest Income ($10) $364 $354 $180 $232 $412 Increase in Net Interest Income-FTE 3 $297 $419 1 Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate, while rate change is change in rate times the previous volume. The rate/volume change, change in rate times change in volume, is allocated between volume change and rate change at the ratio each component bears to the absolute value of their total. 2 Beginning January 1, 2018, we began presenting equity securities previously presented in securities available for sale (taxable) as other earning assets. Prior periods have been revised to conform to the current presentation for comparability. 3 See Table 29, "Selected Financial Data and Reconcilement of Non-U.S. GAAP Measures," in this MD&A for additional information and reconciliations of net interest income-FTE.