STI » Topics » Business Risks

This excerpt taken from the STI 10-K filed Mar 2, 2009.

Business Risks

STYLE="margin-top:12px;margin-bottom:0px">Credit risk.

When we loan money, commit to loan money or enter into
a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of losses if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts. A number of our products
expose us to credit risk, including loans, leases and lending commitments, derivatives, trading account assets, insurance arrangements with respect to such products, and assets held for sale. As one of the nation’s largest lenders, the credit
quality of our portfolio can have a significant impact on our earnings. We estimate and establish reserves for credit risks and credit losses inherent in our credit exposure (including unfunded credit commitments). This process, which is critical to
our financial results and condition, requires difficult, subjective and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers to



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repay their loans. As is the case with any such assessments, there is always the chance that we will fail to identify the proper factors or that we will fail
to accurately estimate the impacts of factors that we identify.

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