STI 2018 Annual Report

41 LHFI Portfolio by Geography (continued) December 31, 2017 Commercial LHFI Consumer LHFI Total LHFI (Dollars in millions) Balance % of Total Commercial Balance % of Total Consumer Balance % of Total LHFI South region: Florida $12,792 17% $13,474 20% $26,266 18% Georgia 10,250 14 8,462 12 18,712 13 Virginia 6,580 9 7,545 11 14,125 10 Maryland 4,104 5 6,095 9 10,199 7 North Carolina 4,482 6 5,354 8 9,836 7 Texas 3,954 5 4,122 6 8,076 6 Tennessee 4,101 5 2,985 4 7,086 5 South Carolina 1,155 2 2,385 4 3,540 2 District of Columbia 1,501 2 1,022 2 2,523 2 Other Southern states 2,791 4 2,452 4 5,243 4 Total South region 51,710 69 53,896 80 105,606 74 Northeast region: New York 4,731 6 1,139 2 5,870 4 Pennsylvania 1,458 2 1,189 2 2,647 2 New Jersey 1,327 2 689 1 2,016 1 Other Northeastern states 2,387 3 895 1 3,282 2 Total Northeast region 9,903 13 3,912 6 13,815 10 West region: California 4,893 6 3,246 5 8,139 6 Other Western states 2,172 3 2,235 3 4,407 3 Total West region 7,065 9 5,481 8 12,546 9 Midwest region: Illinois 1,637 2 922 1 2,559 2 Ohio 718 1 688 1 1,406 1 Missouri 922 1 395 1 1,317 1 Other Midwestern states 2,211 3 2,336 3 4,547 3 Total Midwest region 5,488 7 4,341 6 9,829 7 Foreign loans 1,311 2 74 — 1,385 1 Total $75,477 100% $67,704 100% $143,181 100% Loans Held for Investment LHFI totaled $151.8 billion at December 31, 2018, an increase of $8.7 billion from December 31, 2017, driven largely by increases in C&I, CRE, consumer direct, nonguaranteed residential mortgages, guaranteed student, and consumer indirect loans, offset partially by decreases in commercial construction loans and residential home equity products. Average LHFI for 2018 totaled $145.7 billion, up $1.5 billion, or 1%, compared to 2017, driven primarily by increases in consumer direct, nonguaranteed residential mortgages, CRE, guaranteed student, and consumer indirect loans. These increases were offset partially by declines in average home equity products, C&I, and commercial construction loans. See Table 1 and the "Net Interest Income/Margin" section in this MD&A for more detailed information regarding average LHFI balances, yields earned, and associated impacts on net interest income. Commercial loans increased $5.5 billion, or 7%, during 2018, driven by a $4.8 billion, or 7%, increase in C&I loans resulting fromgrowth in a number of industry verticals and client segments. CRE loans also increased $1.9 billion, or 37%, driven by increased production across a diverse array of property types as a result of investments we have made in new lending capabilities. These increases were offset partially by a $1.3 billion, or 33%, decrease in commercial construction loans due primarily to payoffs and paydowns. Consumer loans increased $3.2 billion, or 5%, during 2018, driven by a $1.9 billion, or 22%, increase in other direct, a $1.7 billion, or 6%, increase in nonguaranteed residential mortgages, a $596 million, or 9%, increase in guaranteed student loans, and a $279 million, or 2%, increase in indirect loans. These increases were offset partially by a $1.2 billion, or 11%, decrease in residential home equity products. At December 31, 2018, 40% of our residential home equity product balance was in a first lien position and 60% was in a junior lien position. For residential home equity products in a junior lien position at December 31, 2018, we own or service 32% of the balance of loans that are senior to the home equity product. Loans Held for Sale LHFS decreased $822 million, or 36%, during 2018, due primarily to loan sales exceeding mortgage production.