PR
Newswire -- July 22, 2010 ATLANTA,
July 22 /PRNewswire-FirstCall/ -- SunTrust Banks, Inc. (NYSE: STI) said
today
that improved asset quality and operating trends led to a significantly
narrowed
loss in the current quarter as compared to the prior year and the first
quarter.
The Company reported a net loss available to common shareholders for
the second
quarter of 2010 of $56 million, or $0.11 per average common share,
versus a
net loss of $164 million, or $0.41 per average common share, in the
second
quarter of 2009 and a net loss of $229 million, or $0.46 per average
common
share, in the first quarter of 2010. Net income before preferred
dividends
was $12 million for the second quarter of 2010. "Our
overall operating trends gained momentum with continued asset quality
improvement,
sequential quarter revenue growth, and favorable deposit volume and
mix,"
said James M. Wells III, chairman and chief executive officer of SunTrust
Banks,
Inc. Mr. Wells also noted the slower pace of loan balance decline in
addition
to continued expense management discipline. "We
continue to execute on our client-focused strategies and position the
Company
to benefit from opportunities in our markets that will hasten our return
to
profitability," he added. "With solid capital and liquidity, we operate
from
a position of strength. Lingering operating environment uncertainties
notwithstanding,
we are encouraged by improving results and prospects." Second
Quarter 2010 Consolidated Highlights
-- The net loss of $0.11 per share improved compared to the second quarter
of 2009 and the first quarter of 2010. Net income before preferred
dividends
was positive this quarter.
-- Total revenue trended up over the first quarter of 2010 with broad-based
growth across core fee income categories. Noninterest income included
net
gains of $57 million on the sale of securities and $63 million in
valuation
gains on the Company's public debt and related hedges carried
at fair value.
-- Relative to the prior year quarter, net interest income increased 8% and
margin increased 39 basis points. Net interest income and margin
remained
stable compared to the first quarter of 2010.
-- Improved asset quality trends continued during the quarter with
nonperforming
assets, nonaccrual loans, and net charge-offs all
declining. Excluding government
guaranteed loan delinquencies, early
stage delinquencies were down 6 basis
points compared to the first
quarter.
-- As a result of improved credit trends, the provision for credit losses
declined significantly compared to the prior year and the sequential
quarter,
while the ratio of allowance for loan losses to total loans
remained stable
over the prior quarter.
-- Core expenses remain tightly managed, with personnel-related expenses
declining
compared to the prior quarter and the second quarter of 2009.
The sequential
quarter increase in total expenses was significantly
affected by debt extinguishment
costs in the current quarter of $63
million.
-- The decline in average loans moderated during the quarter, with declines
continuing to be concentrated in real estate-related loans.
-- Deposits increased as growth in lower-cost deposits was partially offset
by a decline in higher-cost time deposits.
-- Capital ratios remained strong with an estimated Tier 1 common equity
ratio
of 7.85% and Tier 1 capital ratio of 13.40%.
2nd 2nd
Quarter Quarter %
2010 2009 Change
---- ---- ------
Income Statement
(Dollars in millions, except per share data)
Net income
/(loss) $12 $(183) NM%
Net income/(loss) available to common
shareholders
(56) (164) 66
Net income/(loss) per average common
diluted share (0.11)
(0.41) 73
Total revenue - fully taxable-equivalent 2,160 2,193 (2)
Revenue
- fully taxable-equivalent,
excluding securities gains/losses, net 2,103 2,218
(5)
Net interest income - fully taxable-
equivalent 1,208 1,121 8
Provision for credit losses 662 962 (31)
Noninterest income 952 1,072 (11)
Noninterest expense 1,503 1,528 (2)
Net interest margin - fully taxable
equivalent 3.33% 2.94%
Balance Sheet
(Dollars in billions)
Average loans $113.0 $124.1 (9)%
Average consumer and commercial deposits 116.5 113.5 3
Capital
Tier 1 capital ratio (1) 13.40% 12.23%
Tier 1 common equity ratio
(1) 7.85% 7.34%
Total average shareholders' equity to total
average assets
13.03% 12.42%
Asset Quality
Net charge-offs to average loans
(annualized) 2.57% 2.59%
Allowance for loan losses to period end
loans 2.81% 2.37%
Nonperforming
loans to total loans 4.16% 4.48%
---------------------------------- ---- ----
(1) Current period Tier 1 capital and Tier 1 common equity ratios are
estimated
as of the earnings release date.
NM - Not meaningful. Those changes over 100%
or where results change
from negative to positive.
CONSOLIDATED
FINANCIAL PERFORMANCE
Revenue For
the second quarter of 2010, fully taxable-equivalent total revenue was up
14%
on a sequential quarter basis, as noninterest revenues improved across all
major
fee income categories. The current quarter included net gains of $57
million
on the sale of securities and $63 million in valuation gains on the
Company's
public debt and related hedges carried at fair value, while the first
quarter
of 2010 included valuation losses of $20 million. Compared to the second
quarter
of 2009, total revenue declined 2%, as higher net interest income in the
current
period was offset by the $112 million gain from the sale of Visa shares
and
higher mortgage-related income recorded in the second quarter of 2009. For
the six months, fully taxable-equivalent total revenue was $4,060 million,
down
8% from the prior year, despite higher net interest income. The decline in
noninterest
income was primarily driven by lower mortgage production and higher
mortgage
repurchase costs in 2010, as well as a mortgage servicing rights
impairment
recovery and the Visa gain in 2009. Net
Interest Income Fully
taxable-equivalent net interest income was $1,208 million in the second
quarter
of 2010, an increase of 8% from the second quarter of 2009, and
relatively
flat on a sequential quarter basis. Average earning assets declined
$7.7 billion,
or 5%, compared to a year ago, primarily attributable to declines
in loans
and loans held for sale, partially offset by an increase in securities
available
for sale. On a sequential basis, the rate of decline in loan balances
slowed
to 1%. Net
interest margin for the second quarter was 3.33%, up 39 basis points from
the
same quarter last year, primarily driven by lower funding costs. Growth in
lower-cost
deposits and a significant reduction in higher-cost funding sources
contributed
to a 62 basis point decline in the cost of average interest-bearing
liabilities.
Compared to the first quarter of 2010, net interest margin
increased 1 basis
point, also due to lower funding costs. For
the six months, fully taxable-equivalent net interest income was $2,410
million,
an increase of 9% from the prior year, while net interest margin
increased
42 basis points to 3.32%. The same factors in the quarterly
year-over-year
comparison contributed to the six month increase in net interest
income and
margin. Noninterest
Income Total
noninterest income was $952 million for the second quarter of 2010, down
$120
million, or 11%, from the second quarter of 2009. The decrease was due to
the
$112 million gain from the sale of Visa shares in the second quarter of 2009
and
a $234 million decline in mortgage-related income. Market valuation losses
on
the Company's public debt and related hedges carried at fair value were $96
million
in the second quarter of 2009, compared to a gain of $63 million in the
current
quarter. Additionally, the current quarter included net gains on the
sale of
securities of $57 million related to repositioning the investment
portfolio,
compared to net losses of $25 million in the same quarter of 2009. On
a sequential
quarter basis, noninterest income was up $254 million, or 36%, as
all service
and fee-based revenues showed increases. The first quarter of 2010
included
a $20 million mark-to-market loss on publicly traded debt and related
hedges
carried at fair value, compared to the gain this quarter as noted above. Mortgage
production income declined $182 million compared to the second quarter
of 2009,
as production volume declined approximately 60%. Additionally,
estimated mortgage
repurchase losses recognized during the current quarter were
$148 million,
compared to $62 million in the second quarter of 2009. Compared to
the first
quarter of 2010, mortgage repurchase reserves increased to $256
million, up
$46 million, in response to increased repurchase demands. Mortgage
production
income improved $14 million sequentially, despite increased
repurchase costs,
as loan production was higher. Mortgage
servicing related income for the quarter was $88 million, a decline of
$52
million, or 37%, from the second quarter of 2009. The second quarter of 2009
included
a $157 million recovery of impairment on the mortgage servicing rights
carried
at the lower of cost or market. The second quarter of 2009 also included
$63
million of amortization of servicing rights carried at the lower of cost or
market,
while in 2010 all servicing rights were carried at fair value, resulting
in
no amortization. Mortgage servicing related income increased $17 million, or
24%,
from the first quarter of 2010, primarily due to lower fair value-related
changes.
As of June 30, 2010, the Company serviced $177.8 billion in mortgage
loans,
up 3% from the prior year. Trading
account profits and commissions increased $139 million in the second
quarter
of 2010 over the second quarter of 2009, primarily due to the
aforementioned
mark-to-market valuation impacts on the Company's public debt.
The mark-to-market
gain in the current quarter was driven by the widening of
SunTrust's credit
spreads. Revenue from fixed income trading and equity
derivatives declined
compared to the second quarter of 2009. On a sequential
quarter basis, trading
account profits and commissions increased $116 million,
primary due to the
quarter-over-quarter change in mark-to-market valuations on
the Company's public
debt. The current quarter also included net valuation
losses of $1 million,
compared to a first quarter of 2010 net valuation loss of
$16 million on illiquid
securities, certain trading assets, and valuation losses
related to the deterioration
of collateral on previously securitized loans.
Investment banking income declined
20% compared to the record second quarter of
2009, due to decreased equity
capital markets activities and a shift of revenue
from noninterest income to
net interest income upon the consolidation of our
commercial paper conduit
in the first quarter of 2010. During
the current quarter, consumer and commercial fee-based revenues were
mixed
compared to the second quarter of 2009. Card fees and trust and investment
management
income were up 17% and 9%, respectively, while service charges on
deposits
and retail investment services showed moderate declines. For
the six months, total noninterest income was $1,650 million, down 25%
compared
to the same period of 2009. The decline was largely due to lower
mortgage production
income from increased repurchase losses and reduced mortgage
loan production
in 2010, lower mortgage servicing income due to the impairment
recoveries recorded
in 2009, and the gain on the sale of Visa shares in 2009.
Trends in the first
six months related to other fee-based revenues were
consistent with the year-over-year
quarterly comparisons. Noninterest
Expense Total
noninterest expense in the second quarter of 2010 was $1,503 million, down
$25
million, or 2%, from the second quarter of 2009. Losses on the
extinguishment
of debt increased and were offset by a decline in personnel
expense and lower
FDIC insurance costs, as the second quarter of 2009 included
the $78 million
FDIC special assessment. Credit-related expenses of $177 million
during the
current quarter increased slightly compared to the same quarter of
2009; mortgage
reinsurance expense and operating losses declined, while other
real estate
losses increased, primarily related to the sale of residential real
estate-related
assets and provisions for a decline in property values. Personnel
costs declined
due to lower pension expense, as the performance of underlying
pension assets
improved and discount rates increased. The debt extinguishment
loss of $63
million in the current quarter is primarily related to the
extinguishment of
$900 million of debt, while the $39 million loss in the second
quarter of 2009
primarily resulted from the Company's tender for its hybrid debt
securities.
Marketing and customer development expense increased $14 million, or
45%, over
the same quarter of 2009 due to increased promotional and advertising
spending.
Outside processing and software expense increased $12 million, or 9%,
primarily
from initiatives aimed at enhancing the client service experience and
higher
volumes. On
a sequential quarter basis, noninterest expense increased $142 million, or
10%.
Debt extinguishment costs increased $73 million, and credit-related
expenses
increased $34 million on higher other real estate expenses. Outside
processing
and marketing expenses increased $9 million and $10 million,
respectively,
for the same reasons noted above. For
the six months, total noninterest expense was $2,863 million, a decrease of
$817
million, or 22%, over the same period in 2009. The decline was primarily
due
to the $751 million non-cash goodwill impairment charge recorded in the
first
quarter of 2009. Personnel costs declined $65 million, or 5%, and FDIC
insurance
expense declined $67 million, primarily due to the special assessment
paid
in the second quarter of 2009. Credit-related expenses remained elevated
but
declined $39 million compared to a year ago. Debt extinguishment losses
increased
$41 million, primarily due to the debt retired during the second
quarter of
2010. Income
Taxes For
the second quarter, the Company recognized a benefit for income taxes of $50
million,
which compares to a benefit of $149 million for the second quarter of
2009.
The difference in the net tax benefit was primarily attributable to the
lower
level of pre-tax losses; permanent items, such as tax-exempt interest and
federal
tax credits, were stable. U.S.
Treasury Preferred Dividends For
the second quarter and year-to-date periods of 2010 and 2009, the Company
recorded
$67 million and $133 million, respectively, in preferred dividends
related
to the $4.85 billion in preferred securities issued to the U.S. Treasury
under
the Capital Purchase Program. The 5.5% effective yield reflects the 5.0%
dividend
rate and the amortization of the discount recorded on the preferred
stock at
issuance. Balance
Sheet As
of June 30, 2010, SunTrust had total assets of $170.7 billion and
shareholders'
equity of $23.0 billion, representing 14% of total assets. Book
value per common
share was $36.19 as of June 30, 2010. Loans Average
loans for the second quarter of 2010 were $113.0 billion, down $11.1
billion,
or 9%, compared to the second quarter of 2009. The decline was
concentrated
in construction, residential real estate, and commercial loan
categories. SunTrust
continues to manage its exposure to residential real
estate, most notably real
estate construction loans, which declined $3.2
billion, or approximately 50%,
from prior year levels. The $800 million decline
in real estate construction
loans versus the first quarter of 2010 is the
primary driver of the Company's
sequential 1% decline in average total loans.
Relative to both the prior year
and sequential quarter, consumer direct and
indirect loans grew modestly. While
the soft economic environment has continued
to reduce borrower demand for credit,
the pace of loan declines has slowed, and,
during the quarter, loan originations
totaled $17.6 billion, including renewals
and loan commitments. Deposits Average
consumer and commercial deposits for the second quarter of 2010 totaled
$116.5
billion, up 3% from the second quarter of 2009. As clients continued to
migrate
to more liquid products, average consumer and other time deposits
declined
$7.0 billion, or 23%, while demand, NOW and money market accounts
increased
$9.6 billion, or 12%. Average total brokered and foreign deposits
declined
60% from the second quarter of 2009, as the Company's deposit growth
initiatives
and longer-term financing activities enabled a reduction in these
wholesale
funding sources. On a sequential quarter basis, average consumer and
commercial
deposits increased 1%, with the majority of the increase in
lower-cost deposits. Capital
and Liquidity The
Company's capital ratios remained strong at June 30, 2010, with estimated
Tier
1 common equity, Tier 1 capital, and tangible equity to tangible asset
ratios
of 7.85%, 13.40%, and 10.18%, respectively. The Company also has
substantial
available liquidity, as the inflows of high-quality deposits have
largely been
retained in cash and invested in high-quality government-backed
securities. Asset
Quality Improved
asset quality trends continued during the quarter with nonperforming
assets,
nonaccrual loans, and net charge-offs all declining. Despite these
trends,
the allowance for loan losses as a percentage of total loans increased
to 2.81%
as of June 30, 2010, up 1 basis point since March 31, 2010, due to
continued
economic uncertainty. The reserve for unfunded commitments ended the
quarter
at $60 million, down $40 million from March 31, 2010, due to improved
credit
quality related to certain commercial and large corporate clients. In
the second quarter of 2010, provision for credit losses was $662 million, a
decline
of $200 million on a sequential quarter basis and a decline of $300
million
from the second quarter of 2009. Net charge-offs in the second quarter
of 2010
were $722 million, down $79 million from the same quarter last year and
down
$99 million on a sequential quarter basis. Compared to the second quarter
of
2009, declines in commercial and home equity line charge-offs more than
offset
higher construction loan charge-offs. On a sequential quarter basis,
residential
mortgage and home equity line charge-offs declined, and construction
loan charge-offs
increased. The decline in residential mortgage charge-offs was
primarily driven
by actions taken in the first quarter of 2010 related to the
transfer of a
specific group of nonperforming loans to held for sale, as well as
incremental
charge-offs recognized on severely delinquent loans collateralized
by properties
in jurisdictions with extended foreclosure periods. During the
second quarter
of 2010, the sale of the loans transferred to held for sale was
completed,
and final pricing was consistent with expectations. Nonaccrual
loans were $4,699 million, or 4.16% of total loans, as of June 30,
2010, compared
to $5,185 million, or 4.55% of total loans, as of March 31, 2010.
The $486
million decrease was driven primarily by nonaccrual construction loans
declining
$225 million, or 14%, and residential mortgages declining $308
million, or
13%. Nonaccrual loans declined $805 million, or 15%, compared to
June 30, 2009,
due to reductions in residential mortgage and construction loans,
partially
offset by an increase in commercial real estate loans. The overall
decline
in nonaccrual loans was due to charge-offs recognized, the migration of
loans
to other real estate owned, and reduced inflows into nonaccrual.
Nonperforming
assets also declined $702 million, or 11%, compared to June 30,
2009, and $580
million, or 10%, compared to March 31, 2010. The allowance to
nonperforming
loans was 67.64% as of June 30, 2010, up 590 basis points from
March 31, 2010.
Early stage delinquencies as of June 30, 2010, increased 7 basis
points to
1.26% compared to the first quarter; however, excluding government
guaranteed
loan delinquencies, early stage delinquencies were down 6 basis
points. As
a result of continued efforts to work with clients that are experiencing
financial
difficulties, loan modifications have increased. Accruing restructured
loans,
primarily residential real estate-related, increased to $2.3 billion, up
$361
million over the prior quarter end. Nonaccruing restructured loans remained
relatively
stable at $986 million, with commercial-related loans representing
$204 million
of the total. LINE
OF BUSINESS FINANCIAL PERFORMANCE Line
of Business Results The
Company has included line of business financial tables as part of this
release
on their Web site at www.suntrust.com in the Investor Relations section
located
under "About SunTrust." During the second quarter of 2010 the Company
adjusted
its lines of business used to measure business activities to align with
certain
organizational changes implemented during the quarter. The Company's
business
segments are: Retail Banking, Diversified Commercial Banking, Corporate
and
Investment Banking, Mortgage, Wealth and Investment Management, and
Commercial
Real Estate. All revenue in the line of business tables is reported
on a fully
taxable-equivalent basis. For the lines of business, results include
net interest
income, which is computed using matched-maturity funds transfer
pricing. Further,
provision for loan losses is represented by net charge-offs.
SunTrust also
reports results for Corporate Other and Treasury, which includes
the Treasury
department as well as the residual expense associated with
operational and
support expense allocations. This segment also includes
differences created
between internal management accounting practices and
generally accepted accounting
principles, certain matched-maturity funds
transfer pricing credits and charges,
differences in provision for loan losses
compared to net charge-offs, as well
as equity and its related impact. A
detailed discussion of the line of business
results will be included in the
Company's forthcoming quarterly report on Form
10-Q. Corresponding
Financial Tables and Information Investors
are encouraged to review the foregoing summary and discussion of
SunTrust's
earnings and financial condition in conjunction with the detailed
financial
tables and information which SunTrust has also published today and
SunTrust's
forthcoming quarterly report on Form 10-Q. Detailed financial tables
and other
information are also available on the Company's Web site at
www.suntrust.com
in the Investor Relations section located under "About
SunTrust."
This information is also included in a current report on Form 8-K
furnished
with the Securities and Exchange Commission today. Conference
Call SunTrust
management will host a conference call on July 22, 2010, at 8:00 a.m.
(Eastern
Time) to discuss the earnings results and business trends. Individuals
may
call in beginning at 7:45 a.m. (Eastern Time) by dialing 1-888-972-7805
(Passcode:
2Q10). Individuals calling from outside the United States should dial
1-517-308-9091
(Passcode: 2Q10). A replay of the call will be available
approximately one
hour after the call ends on July 22, 2010, and will remain
available until
August 5, 2010, by dialing 1-800-879-7389 (domestic) or
1-402-220-5339 (international). Alternatively,
individuals may listen to the live webcast of the presentation by
visiting
the SunTrust Web site at www.suntrust.com. The webcast will be hosted
under
"Investor Relations," located under "About SunTrust," or may
be accessed
directly from the SunTrust home page by clicking on the earnings-related
link,
"2nd Quarter Earnings Release." Beginning the afternoon of
July 22, 2010,
listeners may access an archived version of the webcast in the
"Webcasts and
Presentations" subsection found under "Investor
Relations." This webcast will be
archived and available for one year.
A link to the Investor Relations page is
also found in the footer of the SunTrust
home page. SunTrust
Banks, Inc., headquartered in Atlanta, is one of the nation's largest
banking
organizations, serving a broad range of consumer, commercial, corporate
and
institutional clients. The Company operates an extensive branch and ATM
network
throughout the high-growth Southeast and Mid-Atlantic states and a full
array
of technology-based, 24-hour delivery channels. The Company also serves
clients
in selected markets nationally. Its primary businesses include deposit,
credit,
and trust and investment management services. Through various
subsidiaries,
the Company provides mortgage banking, insurance, brokerage,
equipment leasing,
and capital markets services. SunTrust's Internet address is
www.suntrust.com. Important
Cautionary Statement About Forward-Looking Statements This
news release includes non-GAAP financial measures to describe SunTrust's
performance.
The reconciliations of those measures to GAAP measures are provided
within
or in the appendix to this news release. In this news release, the
Company
presents net interest income and net interest margin on a fully
taxable-equivalent
("FTE") basis, and ratios on an annualized basis. The FTE
basis adjusts
for the tax-favored status of income from certain loans and
investments. The
Company believes this measure to be the preferred industry
measurement of net
interest income and provides relevant comparison between
taxable and non-taxable
amounts. This
news release may contain forward-looking statements. Statements regarding
future
levels of net interest margin, future levels of and rates of change in
delinquencies
(including within the consumer, commercial and industrial, and
commercial real
estate portfolios), future levels of charge-offs (including
within the construction,
higher risk residential real estate secured and
construction, core mortgage,
and commercial and industrial portfolios), future
levels of the allowance for
loan losses, future levels of service charge income,
future performance of
the commercial and industrial and commercial real estate
portfolios, and the
number or rates of change in the number of residential or
commercial real estate
modifications, are forward-looking statements. Also, any
statement that does
not describe historical or current facts is a
forward-looking statement. These
statements often include the words "believes,"
"expects,"
"anticipates," "estimates," "intends," "plans,"
"targets,"
"initiatives," "potentially," "probably,"
"projects," "outlook" or similar
expressions or future
conditional verbs such as "may," "will," "should,"
"would,"
and "could." Forward-looking statements are based upon the current
beliefs
and expectations of management and on information currently available to
management.
Such statements speak as of the date hereof, and we do not assume
any obligation
to update the statements made herein or to update the reasons why
actual results
could differ from those contained in such statements in light of
new information
or future events. Forward-looking
statements are subject to significant risks and uncertainties.
Investors are
cautioned against placing undue reliance on such statements.
Actual results
may differ materially from those set forth in the forward-looking
statements.
Factors that could cause actual results to differ materially from
those described
in the forward-looking statements can be found in Item 1A of
Part I of our
10-K and in other periodic reports that we file with the SEC.
Those factors
include: difficult market conditions have adversely affected our
industry;
recent levels of market volatility are unprecedented; we are subject
to capital
adequacy guidelines and, if we fail to meet these guidelines, our
financial
condition would be adversely affected; recently enacted legislation,
or legislation
enacted in the future, or any proposed federal programs subject
us to increased
regulation and may adversely affect us; we have not yet received
permission
to repay TARP funds; emergency measures designed to stabilize the
U.S. banking
system are beginning to wind down; we are subject to credit risk;
weakness
in the economy and in the real estate market, including specific
weakness within
our geographic footprint, has adversely affected us and may
continue to adversely
affect us; weakness in the real estate market, including
the secondary residential
mortgage loan markets, has adversely affected us and
may continue to adversely
affect us; as a financial services company, adverse
changes in general business
or economic conditions could have a material adverse
effect on our financial
condition and results of operations; changes in market
interest rates or capital
markets could adversely affect our revenue and
expense, the value of assets
and obligations, and the availability and cost of
capital or liquidity; the
fiscal and monetary policies of the federal government
and its agencies could
have a material adverse effect on our earnings; we may be
required to repurchase
mortgage loans or indemnify mortgage loan purchasers as a
result of breaches
of representations and warranties, borrower fraud, or certain
borrower defaults,
which could harm our liquidity, results of operations, and
financial condition;
we may continue to suffer increased losses in our loan
portfolio despite enhancement
of our underwriting policies; depressed market
values for our stock may require
us to write down goodwill; clients could pursue
alternatives to bank deposits,
causing us to lose a relatively inexpensive
source of funding; consumers may
decide not to use banks to complete their
financial transactions, which could
affect net income; we have businesses other
than banking which subject us to
a variety of risks; hurricanes and other
natural disasters may adversely affect
loan portfolios and operations and
increase the cost of doing business; negative
public opinion could damage our
reputation and adversely impact business and
revenues; we rely on other
companies to provide key components of our business
infrastructure; the
soundness of other financial institutions could adversely
affect us; we rely on
our systems, employees, and certain counterparties, and
certain failures could
materially adversely affect our operations; we depend
on the accuracy and
completeness of information about clients and counterparties;
we are subject to
certain litigation, and our expenses related to this litigation
may adversely
affect our results; regulation by federal and state agencies
could adversely
affect the business, revenue, and profit margins; competition
in the financial
services industry is intense and could result in losing business
or reducing
margins; future legislation could harm our competitive position;
maintaining or
increasing market share depends on market acceptance and regulatory
approval of
new products and services; we may not pay dividends on your common
stock; our
ability to receive dividends from our subsidiaries accounts for
most of our
revenue and could affect our liquidity and ability to pay dividends;
significant
legal actions could subject us to substantial uninsured liabilities;
recently
declining values of real estate, increases in unemployment, and the
related
effects on local economies may increase our credit losses, which would
negatively
affect our financial results; deteriorating credit quality,
particularly in
real estate loans, has adversely impacted us and may continue to
adversely
impact us; our allowance for loan losses may not be adequate to cover
our eventual
losses; we will realize future losses if the proceeds we receive
upon liquidation
of nonperforming assets are less than the carrying value of
such assets; disruptions
in our ability to access global capital markets may
negatively affect our capital
resources and liquidity; in 2009 and 2010, credit
rating agencies downgraded
the credit ratings of SunTrust Bank and SunTrust
Banks, Inc., and these downgrades
and any subsequent downgrades could adversely
impact the price and liquidity
of our securities and could have an impact on our
businesses and results of
operations; we have in the past and may in the future
pursue acquisitions,
which could affect costs and from which we may not be able
to realize anticipated
benefits; we depend on the expertise of key personnel,
and if these individuals
leave or change their roles without effective
replacements, operations may
suffer; we may not be able to hire or retain
additional qualified personnel
and recruiting and compensation costs may
increase as a result of turnover,
both of which may increase costs and reduce
profitability and may adversely
impact our ability to implement our business
strategy; our accounting policies
and processes are critical to how we report
our financial condition and results
of operations, and require management to
make estimates about matters that
are uncertain; changes in our accounting
policies or in accounting standards
could materially affect how we report our
financial results and condition;
our stock price can be volatile; our disclosure
controls and procedures may
not prevent or detect all errors or acts of fraud;
our financial instruments
carried at fair value expose us to certain market
risks; our revenues derived
from our investment securities may be volatile and
subject to a variety of
risks; and we may enter into transactions with
off-balance sheet affiliates
or our subsidiaries.
SunTrust Banks, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in
millions, except per share data) (Unaudited)
Three Months Ended
June 30 %
-------
Change
2010 2009 (4)
---- ---- -------
EARNINGS & DIVIDENDS
Net income/(loss) $12 ($183) NM %
Net loss available
to common
shareholders (56) (164) 66
Net loss available to common
shareholders excluding
goodwill/intangible impairment
charges other than
MSRs (1) (56) (164) 66
Total revenue - FTE (2) 2,160 2,193 (2)
Total revenue
-FTE excluding
securities (gains)/losses, net
(1) 2,103 2,218 (5)
Net loss per average common share
Diluted (0.11) (0.41) 73
Diluted excluding
goodwill/
intangible impairment charges
other than MSRs (1) (0.11) (0.41)
73
Basic (0.11) (0.41) 73
Dividends paid per common share 0.01 0.10 (90)
CONDENSED BALANCE SHEETS
Selected Average Balances
-------------------------
Total assets $171,273 $176,480 (3)%
Earning assets 145,464 153,177 (5)
Loans 113,016 124,123 (9)
Consumer and commercial deposits 116,460 113,528
3
Brokered and foreign deposits 2,670 6,608 (60)
Total shareholders' equity
22,313 21,926 2
As of
-----
Total assets 170,668 176,735 (3)
Earning assets 145,601
154,345 (6)
Loans 112,925 122,816 (8)
Allowance for loan and lease
losses 3,156 2,896 9
Consumer and commercial deposits 116,261 113,746 2
Brokered and foreign deposits 2,407 5,055 (52)
Total shareholders' equity
23,024 22,953 -
FINANCIAL RATIOS & OTHER DATA
Return on average total assets 0.03% (0.42)%
NM %
Return on average assets less net
unrealized
securities gains
(1) (0.08) (0.41) 80
Return on average common
shareholders' equity (1.29)
(3.95) 67
Return on average realized common
shareholders' equity (1) (2.53)
(4.02) 37
Net interest margin (2) 3.33 2.94 13
Efficiency ratio (2) 69.57
69.68 -
Tangible efficiency ratio (1) 68.96 69.05 -
Effective tax rate/(benefit)
(133.13) (44.81) NM
Tier 1 common equity 7.85 (3) 7.34 6
Tier 1 capital
13.40 (3) 12.23 9
Total capital 16.85 (3) 15.31 9
Tier 1 leverage 10.94
(3) 11.02 (1)
Total average shareholders'
equity to total average assets
13.03 12.42 5
Tangible equity to tangible
assets (1) 10.18 9.75 4
Book value per common share $36.19 $36.16 -
Tangible book value per common
share (1) 23.58 23.41 1
Market price:
High 31.92 20.86 53
Low 23.12
10.50 NM
Close 23.30 16.45 42
Market capitalization 11,648 8,205 42
Average common shares outstanding
(000s)
Diluted (5) 495,351 399,242 24
Basic 495,351 399,242 24
Full-time equivalent employees 28,250 28,520 (1)
Number of ATMs 2,902 2,695
8
Full service banking offices 1,675 1,692 (1)
Six Months Ended
June 30 %
-------
Change
2010 2009 (4)
----
---- -------
EARNINGS & DIVIDENDS
Net income/(loss) ($148) ($999) 85%
Net loss
available to common
shareholders (285) (1,040) 73
Net loss available to
common
shareholders excluding
goodwill/intangible impairment
charges
other than MSRs (1) (285) (325) 12
Total revenue - FTE (2) 4,060 4,407 (8)
Total revenue -FTE excluding
securities (gains)/losses, net (1) 4,001 4,429
(10)
Net loss per average common share
Diluted (0.58) (2.77) 79
Diluted
excluding goodwill/
intangible impairment charges other
than MSRs (1)
(0.58) (0.86) 33
Basic (0.58) (2.77) 79
Dividends paid per common share
0.02 0.20 (90)
CONDENSED BALANCE SHEETS
Selected Average Balances
-------------------------
Total assets $171,351 $177,669 (4)%
Earning assets 146,176 153,780 (5)
Loans 113,721 124,725 (9)
Consumer and commercial deposits 115,776 110,538
5
Brokered and foreign deposits 3,049 7,011 (57)
Total shareholders' equity
22,326 22,146 1
As of
-----
Total assets
Earning assets
Loans
Allowance for
loan and lease losses
Consumer and commercial deposits
Brokered and foreign
deposits
Total shareholders' equity
FINANCIAL RATIOS & OTHER DATA
Return on average total assets (0.17)% (1.13)%
85%
Return on average assets less net
unrealized
securities gains
(1) (0.25) (1.15) 78
Return on average common
shareholders' equity (3.31)
(12.39) 73
Return on average realized common
shareholders' equity (1)
(4.23) (13.10) 68
Net interest margin (2) 3.32 2.90 14
Efficiency ratio
(2) 70.52 83.60 (16)
Tangible efficiency ratio (1) 69.87 65.98 6
Effective
tax rate/(benefit) (62.17) (23.09) NM
Tier 1 common equity
Tier 1 capital
Total capital
Tier 1 leverage
Total average shareholders' equity to
total average assets 13.03 12.46 5
Tangible equity to tangible assets
(1)
Book
value per common share
Tangible book value per common share
(1)
Market
price:
High 31.92 30.18 6
Low 20.16 6.00 NM
Close 23.30 16.45 42
Market capitalization
Average common shares outstanding
(000s)
Diluted (5) 495,112 375,429 32
Basic 495,112 375,429 32
Full-time equivalent employees
Number of ATMs
Full service banking offices
(1) See Appendix A for reconcilements of non-GAAP performance measures.
(2)
Total revenue, net interest margin, and efficiency ratios are
presented on
a fully taxable-equivalent ("FTE") basis. The FTE
basis adjusts
for the tax-favored status of net interest income
from certain loans and investments.
The Company believes this
measure to be the preferred industry measurement
of net interest
income and it enhances comparability of net interest
income
arising from taxable and tax-exempt sources. Total revenue
- FTE equals net
interest income on a FTE basis plus noninterest
income.
(3) Current period
tier 1 common equity, tier 1 capital, total
capital and tier 1 leverage ratios
are estimated as of the earnings
release date.
(4) "NM" -Not
meaningful. Those changes over 100 percent were not
considered to be meaningful.
(5) For earnings per share calculation purposes, the impact of
dilutive securities
are excluded from the diluted share count during
periods that the Company
has recognized a net loss
available to common shareholders because the impact
would be antidilutive.
SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share data) (Unaudited)
Three Months Ended
------------------
March December
June 30 31 31
2010 2010 2009
---- ---- ----
EARNINGS & DIVIDENDS
Net income/(loss) $12 ($161) ($248)
Net loss
available to common
shareholders (56) (229) (316)
Net loss available to
common
shareholders excluding
goodwill/intangible impairment
charges
other than MSRs (1) (56) (229) (316)
Total revenue - FTE (2) 2,160 1,900 1,949
Total revenue -FTE excluding
securities (gains)/losses, net
(1) 2,103
1,898 1,876
Net loss per average common
share
Diluted (0.11) (0.46)
(0.64)
Diluted excluding goodwill/
intangible impairment charges
other
than MSRs (1) (0.11) (0.46) (0.64)
Basic (0.11) (0.46) (0.64)
Dividends
paid per common share 0.01 0.01 0.01
CONDENSED BALANCE SHEETS
Selected Average Balances
-------------------------
Total assets $171,273 $171,429 $174,041
Earning assets 145,464 146,896 146,587
Loans 113,016 114,435 115,036
Consumer and commercial
deposits 116,460
115,084 117,008
Brokered and foreign deposits 2,670 3,433 5,145
Total
shareholders' equity 22,313 22,338 22,381
As of
-----
Total assets 170,668 171,796 174,165
Earning assets 145,601
147,056 147,896
Loans 112,925 113,979 113,675
Allowance for loan and lease
losses 3,156 3,176 3,120
Consumer and commercial
deposits 116,261 116,144
116,303
Brokered and foreign deposits 2,407 2,606 5,560
Total shareholders'
equity 23,024 22,620 22,531
FINANCIAL RATIOS & OTHER DATA
Return on average total assets 0.03% (0.38)%
(0.57)%
Return on average assets less
net unrealized
securities gains
(1) (0.08) (0.42) (0.70)
Return on average common
shareholders' equity
(1.29) (5.34) (7.19)
Return on average realized
common shareholders' equity
(1) (2.53) (5.93) (8.81)
Net interest margin (2) 3.33 3.32 3.27
Efficiency
ratio (2) 69.57 71.60 74.58
Tangible efficiency ratio (1) 68.96 70.91 73.96
Effective tax rate/(benefit) (133.13) (54.70) (51.46)
Tier 1 common equity
7.85 (3) 7.70 7.67
Tier 1 capital 13.40 (3) 13.13 12.96
Total capital
16.85 (3) 16.68 16.43
Tier 1 leverage 10.94 (3) 10.95 10.90
Total average
shareholders'
equity to total average assets 13.03 13.03 12.86
Tangible
equity to tangible
assets (1) 10.18 9.86 9.66
Book value per common share $36.19 $35.40 $35.29
Tangible book value per common
share (1) 23.58 22.76 22.59
Market price:
High 31.92 28.39 24.09
Low
23.12 20.16 18.45
Close 23.30 26.79 20.29
Market capitalization 11,648
13,391 10,128
Average common shares
outstanding (000s)
Diluted (4) 495,351 494,871 494,332
Basic 495,351 494,871 494,332
Full-time equivalent employees 28,250 28,263 28,001
Number of ATMs 2,902 2,828
2,822
Full service banking offices 1,675 1,678 1,683
Three Months Ended
------------------
September
30 June 30
2009
2009
---- ----
EARNINGS & DIVIDENDS
Net income/(loss) ($317) ($183)
Net loss available
to common
shareholders (377) (164)
Net loss available to common
shareholders
excluding
goodwill/intangible impairment charges
other than MSRs (1) (377)
(164)
Total revenue - FTE (2) 1,943 2,193
Total revenue -FTE excluding
securities
(gains)/losses, net (1) 1,896 2,218
Net loss per average common
share
Diluted (0.76) (0.41)
Diluted excluding goodwill/intangible
impairment charges other than MSRs (1) (0.76) (0.41)
Basic (0.76) (0.41)
Dividends paid per common share 0.01 0.10
CONDENSED BALANCE SHEETS
Selected Average Balances
-------------------------
Total assets $172,463 $176,480
Earning assets 149,579 153,177
Loans 119,796
124,123
Consumer and commercial deposits 114,486 113,528
Brokered and
foreign deposits 5,193 6,608
Total shareholders' equity 22,468 21,926
As of
-----
Total assets 172,718 176,735
Earning assets 145,554 154,345
Loans 116,488 122,816
Allowance for loan and lease losses 3,024 2,896
Consumer and commercial deposits 113,601 113,746
Brokered and foreign deposits
5,730 5,055
Total shareholders' equity 22,908 22,953
FINANCIAL RATIOS & OTHER DATA
Return on average total assets (0.73)% (0.42)%
Return on average assets less net
unrealized
securities gains (1) (0.83)
(0.41)
Return on average common shareholders'
equity (8.52) (3.95)
Return on average realized common
shareholders' equity (1) (9.70) (4.02)
Net interest margin (2) 3.10 2.94
Efficiency ratio (2) 73.53 69.68
Tangible
efficiency ratio (1) 72.82 69.05
Effective tax rate/(benefit) (51.46) (44.81)
Tier 1 common equity 7.49 7.34
Tier 1 capital 12.58 12.23
Total capital
15.92 15.31
Tier 1 leverage 11.08 11.02
Total average shareholders' equity
to
total average assets 13.03 12.42
Tangible equity to tangible assets
(1) 9.96 9.75
Book value per common share $36.06 $36.16
Tangible book value per common share
(1) 23.35 23.41
Market price:
High 24.43 20.86
Low 14.50 10.50
Close 22.55 16.45
Market capitalization 11,256 8,205
Average common shares outstanding (000s)
Diluted (4) 494,169 399,242
Basic
494,169 399,242
Full-time equivalent employees 28,015 28,520
Number of ATMs 2,807 2,695
Full service banking offices 1,690 1,692
(1) See Appendix A for reconcilements of non-GAAP performance measures.
(2)
Total revenue, net interest margin, and efficiency ratios are
presented on
a fully taxable-equivalent ("FTE") basis. The FTE
basis adjusts
for the tax-favored status of
net interest income from certain loans and investments.
The Company
believes this measure to be the preferred industry measurement
of
net interest income and it
enhances comparability of net interest income
arising from taxable
and tax-exempt sources. Total revenue - FTE equals net
interest
income on a FTE basis plus
noninterest income.
(3) Current
period tier 1 common equity, tier 1 capital, total
capital and tier 1 leverage
ratios are estimated as of the earnings
release date.
(4) For earnings
per share calculation purposes, the impact of
dilutive securities are excluded
from the diluted share count during
periods that the Company has
recognized
a net loss available to common shareholders because the
impact would be antidilutive.
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE EARNINGS RELEASE
(Dollars in millions, except per share
data) (Unaudited)
Three Months Ended
------------------
March December
June 30 31 31
2010 2010 2009
---- ---- ----
NON-GAAP MEASURES PRESENTED IN THE
EARNINGS RELEASE (8)
----------------------------------
Net income/(loss) $12 ($161) ($248)
Securities (gains)/losses, net of
tax (35) (1) (45)
--- --- ---
Net loss excluding net securities
(gains)/losses,
net of tax (23) (162) (293)
The Coca-Cola Company stock
dividend, net
of tax (12) (12) (11)
--- --- ---
Net loss excluding net securities
(gains)/losses and The
Coca-Cola Company stock dividend,
net of tax (35)
(174) (304) Preferred
dividends, Series A (2) (2) (2)
U.S. Treasury preferred dividends
and
accretion of discount (66) (66) (66)
Dividends and undistributed earnings
allocated to unvested shares - - -
Gain on purchase of Series A
preferred
stock - - -
--- --- ---
Net loss available to common
shareholders
excluding net
securities
(gains)/losses and The Coca-Cola
Company
stock dividend ($103) ($242) ($372)
===== ===== =====
Total average assets $171,273 $171,429 $174,041
Average net unrealized securities
gains (1,969) (1,884) (1,986)
------ ------ ------
Average assets less
net unrealized
securities gains $169,304 $169,545 $172,055
======== ========
======== Total
average common shareholders'
equity $17,387 $17,419 $17,467
Average accumulated
other
comprehensive income (998) (889) (698)
---- ---- ----
Total
average realized common
shareholders' equity $16,389 $16,530 $16,769
=======
======= =======
Return on average total assets 0.03% (0.38)% (0.57)%
Impact of excluding net
realized and
unrealized securities
(gains)/losses and The Coca-Cola
Company stock dividend (0.11) (0.04) (0.13)
----- ----- -----
Return on
average total assets less
net unrealized
securities gains (1) (0.08)%
(0.42)% (0.70)%
====== ====== ======
Return on average common
shareholders' equity (1.29)% (5.34)% (7.19)%
Impact of excluding net realized and
unrealized securities (gains)/
losses
and The Coca-Cola Company
stock dividend (1.24) (0.59) (1.62)
----- -----
-----
Return on average realized common
shareholders' equity (2) (2.53)%
(5.93)% (8.81)%
====== ====== ======
Efficiency ratio (3) 69.57% 71.60% 74.58%
Impact of excluding amortization/
impairment of goodwill/intangible
assets
other than MSRs (0.61) (0.69)
(0.62)
----- ----- -----
Tangible efficiency ratio (4) 68.96% 70.91% 73.96%
===== ===== =====
Total shareholders' equity $23,024 $22,620 $22,531
Goodwill, net of deferred
taxes (6,197) (6,202) (6,204)
Other intangible assets including
MSRs,
net of deferred taxes (1,409) (1,761) (1,671)
MSRs 1,298 1,641 1,539
-----
----- -----
Tangible equity 16,716 16,298 16,195
Preferred stock (4,929)
(4,923) (4,917)
------ ------ ------
Tangible common equity $11,787 $11,375
$11,278
======= ======= =======
Total assets $170,668 $171,796 $174,165
Goodwill (6,323) (6,323) (6,319)
Other intangible assets including
MSRs (1,443) (1,800) (1,711)
MSRs 1,298
1,641 1,539
----- ----- -----
Tangible assets $164,200 $165,314 $167,674
======== ======== ========
Tangible equity to tangible assets
(5) 10.18% 9.86% 9.66%
Tangible book
value per common share
(7) $23.58 $22.76 $22.59
Net interest income $1,178 $1,171 $1,176
Taxable-equivalent adjustment 30
31 31
--- --- ---
Net interest income - FTE 1,208 1,202 1,207
Noninterest
income 952 698 742
--- --- ---
Total revenue - FTE 2,160 1,900 1,949
Securities (gains)/losses, net (57) (2) (73)
--- --- ---
Total revenue
-FTE excluding net
securities (gains)/losses (6) $2,103 $1,898 $1,876
====== ====== ======
Three Months Ended
------------------
September
30 June 30
2009
2009
---- ----
NON-GAAP MEASURES PRESENTED IN THE EARNINGS
RELEASE (8)
-------------------------------------------
Net income/(loss) ($317) ($183)
Securities (gains)/losses, net of tax (29)
15
--- ---
Net loss excluding net securities
(gains)/losses, net of
tax (346) (168)
The Coca-Cola Company stock dividend, net of
tax (11)
(11)
--- ---
Net loss excluding net securities
(gains)/losses and
The
Coca-Cola Company stock dividend, net of tax (357) (179)
Preferred dividends, Series A (2) (6)
U.S. Treasury preferred dividends and
accretion of discount (66) (66)
Dividends and undistributed earnings
allocated
to unvested shares 3 2
Gain on purchase of Series A preferred stock 5 89
--- ---
Net loss available to common shareholders
excluding net securities
(gains)/losses and The Coca-Cola Company
stock dividend ($417) ($160)
===== ===== Total
average assets $172,463 $176,480
Average net unrealized securities gains (1,607)
(1,506)
------ ------
Average assets less net unrealized securities
gains $170,856 $174,974
======== ========
Total average common shareholders' equity $17,556 $16,700
Average accumulated
other comprehensive
income (504) (745)
---- ----
Total average realized
common shareholders'
equity $17,052 $15,955
======= =======
Return on average total assets (0.73)% (0.42)%
Impact of excluding net realized
and
unrealized securities
(gains)/losses and The Coca-Cola Company
stock dividend (0.10) 0.01
----- ----
Return on average total assets less
net
unrealized
securities gains (1) (0.83)% (0.41)%
====== ======
Return on average common shareholders' equity (8.52)% (3.95)%
Impact of excluding
net realized and
unrealized securities (gains)/
losses and The Coca-Cola
Company stock
dividend (1.18) (0.07)
----- -----
Return on average
realized common
shareholders' equity (2) (9.70)% (4.02)%
====== ======
Efficiency ratio (3) 73.53% 69.68%
Impact of excluding amortization/impairment
of goodwill/intangible assets
other than MSRs (0.71) (0.63)
----- -----
Tangible efficiency ratio (4) 72.82% 69.05%
===== =====
Total shareholders' equity $22,908 $22,953
Goodwill, net of deferred taxes
(6,205) (6,213)
Other intangible assets including MSRs, net
of deferred
taxes (1,560) (1,468)
MSRs 1,423 1,322
----- -----
Tangible equity
16,566 16,594
Preferred stock (4,911) (4,919)
------ ------
Tangible
common equity $11,655 $11,675
======= =======
Total assets $172,718 $176,735
Goodwill (6,314) (6,314)
Other intangible
assets including MSRs (1,604) (1,517)
MSRs 1,423 1,322
----- -----
Tangible assets $166,223 $170,226
======== ========
Tangible equity to tangible assets (5) 9.96% 9.75%
Tangible book value per
common share (7) $23.35 $23.41
Net interest income $1,137 $1,090
Taxable-equivalent adjustment 31 31
--- ---
Net interest income - FTE 1,168 1,121
Noninterest income 775 1,072
--- -----
Total revenue - FTE 1,943 2,193
Securities (gains)/losses, net
(47) 25
--- ---
Total revenue -FTE excluding net securities
(gains)/losses
(6) $1,896 $2,218
====== ======
Six Months Ended
----------------
June 30 June 30
2010 2009
----
---- NON-GAAP
MEASURES PRESENTED IN THE EARNINGS
RELEASE (8)
-------------------------------------------
Net income/(loss) ($148) ($999)
Securities (gains)/losses, net of tax (36)
13
--- ---
Net loss excluding net securities
(gains)/losses, net of
tax (184) (986)
The Coca-Cola Company stock dividend, net
of tax (23)
(22)
--- ---
Net loss excluding net securities
(gains)/losses and
The
Coca-Cola Company stock dividend, net of
tax (207) (1,008)
Preferred dividends, Series A (4) (10)
U.S. Treasury preferred dividends and
accretion of discount (133) (133)
Dividends and undistributed earnings
allocated to unvested shares - 13
Gain on purchase of Series A preferred stock
- 89
--- ---
Net loss available to common shareholders
excluding net
securities
(gains)/losses and The Coca-Cola Company
stock dividend ($344)
($1,049)
===== =======
Total average assets $171,351 $177,669
Average net unrealized securities gains
(1,927) (1,424)
------ ------
Average assets less net unrealized
securities
gains $169,424 $176,245
======== ========
Total average common shareholders' equity $17,403 $16,921
Average accumulated
other comprehensive
income (944) (785)
---- ----
Total average realized
common shareholders'
equity $16,459 $16,136
======= =======
Return on average total assets (0.17)% (1.13)%
Impact of excluding net realized
and
unrealized securities
(gains)/losses and The Coca-Cola Company
stock dividend (0.08) (0.02)
----- -----
Return on average total assets
less net
unrealized
securities gains (1) (0.25)% (1.15)%
====== ======
Return on average common shareholders'
equity (3.31)% (12.39)%
Impact
of excluding net realized and
unrealized securities (gains)/
losses and
The Coca-Cola Company stock
dividend (0.92) (0.71)
----- -----
Return
on average realized common
shareholders' equity (2) (4.23)% (13.10)%
======
======= Efficiency
ratio (3) 70.52% 83.60%
Impact of excluding amortization/impairment
of
goodwill/intangible assets
other than MSRs (0.65) (17.62)
----- ------
Tangible efficiency ratio (4) 69.87% 65.98%
===== =====
Total shareholders' equity
Goodwill, net of deferred taxes
Other intangible
assets including MSRs, net
of deferred taxes
MSRs
Tangible equity
Preferred stock
Tangible common equity
Total assets
Goodwill
Other intangible assets including MSRs
MSRs
Tangible assets
Tangible equity to tangible assets (5)
Tangible book value per common share
(7) Net interest
income $2,349 $2,152
Taxable-equivalent adjustment 61 62
--- ---
Net
interest income - FTE 2,410 2,214
Noninterest income 1,650 2,193
-----
-----
Total revenue - FTE 4,060 4,407
Securities (gains)/losses, net (59)
22
--- ---
Total revenue -FTE excluding net securities
(gains)/losses
(6) $4,001 $4,429
====== ======
(1) SunTrust presents a return on average assets less net unrealized
gains
on securities. The foregoing numbers primarily reflect
adjustments to remove
the effects of the securities portfolio which
includes the ownership by the
Company of common shares of The Coca-
Cola Company. The Company uses this
information internally to gauge
its actual performance in the industry. The
Company
believes that the return on average assets less the net unrealized
securities gains is more indicative of the Company's return on
assets because
it more accurately reflects the return on the assets
that are
related
to the Company's core businesses which are primarily client
relationship and
client transaction driven. The return on average
assets less net unrealized
gains on securities is computed by
dividing
annualized net loss, excluding
securities (gains)/losses and The
Coca-Cola Company dividend, net of tax,
by average assets less net
unrealized securities gains.
(2) SunTrust believes
that the return on average realized common
shareholders' equity is more indicative
of the Company's return on
equity because the excluded equity relates primarily
to the holding
of a
specific security. The return on average realized
common
shareholders' equity is computed by dividing annualized net loss
available to common shareholders, excluding securities
(gains)/losses and
The
Coca-Cola Company dividend, net of tax, by average realized common
shareholders' equity.
(3) Computed by dividing noninterest expense by total
revenue - FTE.
The efficiency ratios are presented on an FTE basis. The FTE
basis
adjusts for the tax-favored status of net interest income from
certain
loans and investments. The Company believes this measure to
be the preferred
industry measurement of net interest income and it
enhances comparability
of net interest income arising from
taxable and tax-exempt sources.
(4)
SunTrust presents a tangible efficiency ratio which excludes the
amortization/impairment
of goodwill/intangible assets other than
MSRs. The Company believes this measure
is useful to investors
because, by removing the effect of these intangible
asset costs (the
level of which may vary from company to company), it allows
investors to more easily compare the Company's efficiency to other
companies
in the industry. This measure is utilized by management to
assess the efficiency
of the Company and its lines of business.
(5) SunTrust presents a tangible
equity to tangible assets ratio that
excludes the after-tax impact of purchase
accounting intangible
assets. The Company believes this measure is useful
to investors
because, by removing the effect of intangible assets that result
from
merger and acquisition activity (the level of which may vary from
company to company), it allows investors to more easily compare the
Company's
capital adequacy to other companies in the industry. This
measure is used
by management to analyze capital adequacy.
(6) SunTrust presents total revenue-
FTE excluding net realized
securities (gains)/losses. The Company believes
noninterest income
without net securities (gains)/losses is more indicative
of the
Company's performance because it isolates income that is primarily
client relationship and client transaction driven and is more
indicative of
normalized operations.
(7) SunTrust presents a tangible book value per common
share that
excludes the after-tax impact of purchase accounting intangible
assets and also excludes preferred stock from tangible equity. The
Company
believes this measure is useful to investors because, by
removing the effect
of intangible assets that result from merger and
acquisition activity as well
as preferred stock (the level of which
may
vary from company to company),
it allows investors to more easily
compare the Company's book value on common
stock to other companies
in the industry.
(8) Certain amounts in this
schedule are presented net of applicable
income taxes, which are calculated
based on each subsidiary's
federal and state tax rates and laws. In general,
the federal
marginal
tax rate is 35%, but the state marginal tax rates
range from 1% to 8%
in accordance with the subsidiary's income tax filing
requirements
with various tax authorities. In addition, the effective tax
rate
may
differ from the federal and state marginal tax rates in certain
cases
where a permanent difference exists.
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE EARNINGS RELEASE, continued
(Dollars in millions, except
per share data) (Unaudited)
Three Months Ended
------------------
June March December
30 31 31
2010 2010 2009
---- ---- ----
NON-GAAP MEASURES PRESENTED IN THE
EARNINGS RELEASE (2)
----------------------------------
Total noninterest expense $1,503 $1,361 $1,454
Goodwill/intangible impairment
charges
other than MSRs - - -
--- --- ---
Total noninterest expense
excluding
goodwill/intangible impairment charges
other than MSRs(1) $1,503
$1,361 $1,454
====== ====== ======
Net income/(loss) $12 ($161) ($248)
Goodwill/intangible impairment charges
other than MSRs, after tax - - -
--- --- ---
Net income/(loss) excluding
goodwill/
intangible impairment charges other
than MSRs, after tax(1)
$12 ($161) ($248)
=== ===== =====
Net loss available to common
shareholders ($56) ($229) ($316)
Goodwill/intangible
impairment charges
other than MSRs attributable to
common shareholders,
after tax - - -
--- --- ---
Net loss available to common
shareholders
excluding goodwill/
intangible
impairment charges other than MSRs,
after tax(1) ($56) ($229) ($316)
==== ===== =====
Net loss per average common share,
diluted ($0.11) ($0.46) ($0.64)
Impact
of excluding goodwill/intangible
impairment charges other than MSRs
attributable
to common shareholders, after tax - - -
--- --- ---
Net loss per average
diluted common
share, excluding goodwill/intangible
impairment charges
other than MSRs,
after tax(1) ($0.11) ($0.46) ($0.64)
====== ====== ======
SUPPLEMENTAL INCOME STATEMENT
RECONCILIATION
-----------------------------
Net income/(loss) $12 ($161) ($248)
Preferred dividends, Series A (2) (2)
(2)
U.S. Treasury preferred dividends and
accretion of discount (66) (66)
(66)
Dividends and undistributed earnings
allocated to unvested shares
- - -
Gain on purchase of Series A preferred
stock - - -
--- --- ---
Net loss available to common
shareholders ($56) ($229) ($316)
==== =====
=====
Three Months Ended
------------------
September
30 June 30
2009
2009
---- ----
NON-GAAP MEASURES PRESENTED IN THE EARNINGS
RELEASE (2)
-------------------------------------------
Total noninterest expense $1,429 $1,528
Goodwill/intangible impairment charges
other
than MSRs - -
--- ---
Total noninterest expense excluding goodwill/
intangible impairment charges other than
MSRs(1) $1,429 $1,528
======
======
Net
income/(loss) ($317) ($183)
Goodwill/intangible impairment charges other
than MSRs, after tax - -
--- ---
Net income/(loss) excluding goodwill/
intangible impairment charges other than
MSRs, after tax(1) ($317) ($183)
===== =====
Net loss available to common shareholders ($377) ($164)
Goodwill/intangible
impairment charges other
than MSRs attributable to
common shareholders,
after tax - -
--- ---
Net loss available to common shareholders
excluding
goodwill/intangible
impairment charges other than MSRs, after
tax(1) ($377)
($164)
===== =====
Net loss per average common share, diluted ($0.76) ($0.41)
Impact of excluding
goodwill/intangible
impairment charges other than MSRs
attributable
to common shareholders, after tax - -
--- ---
Net loss per average diluted
common share,
excluding goodwill/intangible
impairment charges other than
MSRs, after
tax(1) ($0.76) ($0.41)
====== ======
SUPPLEMENTAL INCOME STATEMENT RECONCILIATION
--------------------------------------------
Net income/(loss) ($317) ($183)
Preferred dividends, Series A (2) (6)
U.S. Treasury preferred dividends and
accretion of discount (66) (66)
Dividends and undistributed earnings
allocated to unvested shares 3 2
Gain on purchase of Series A preferred stock 5 89
--- ---
Net loss available to common shareholders ($377) ($164)
===== =====
Six Months Ended
----------------
June 30 June 30
2010 2009
----
----
NON-GAAP
MEASURES PRESENTED IN THE EARNINGS
RELEASE (2)
-------------------------------------------
Total noninterest expense $2,863 $3,680
Goodwill/intangible impairment charges
other than
MSRs - 751
--- ---
Total noninterest expense excluding
goodwill/
intangible impairment charges other than MSRs(1) $2,863 $2,929
====== ======
Net income/(loss) ($148) ($999)
Goodwill/intangible impairment charges other
than
MSRs, after tax - 724
--- ---
Net income/(loss) excluding goodwill/intangible
impairment charges other than MSRs, after tax(1) ($148) ($275)
===== =====
Net loss available to common shareholders ($285) ($1,040)
Goodwill/intangible
impairment charges other than
MSRs attributable to
common shareholders,
after tax - 715
--- ---
Net loss available to common shareholders
excluding goodwill/intangible
impairment charges other than MSRs, after tax(1)
($285) ($325)
===== =====
Net loss per average common share, diluted ($0.58) ($2.77)
Impact of excluding
goodwill/intangible
impairment charges other than MSRs attributable
to
common shareholders, after tax - 1.91
--- ----
Net loss per average diluted
common share,
excluding goodwill/intangible
impairment charges other than
MSRs, after tax(1) ($0.58) ($0.86)
====== ======
SUPPLEMENTAL INCOME STATEMENT RECONCILIATION
--------------------------------------------
Net income/(loss) ($148) ($999)
Preferred dividends, Series A (4) (10)
U.S. Treasury preferred dividends and accretion of
discount (133) (133)
Dividends and undistributed earnings allocated to
unvested shares - 13
Gain on purchase of Series A preferred stock - 89
--- ---
Net loss available to common shareholders ($285) ($1,040)
===== =======
(1) SunTrust presents noninterest expense, net income/(loss), net
loss available
to common shareholders, and net loss per average
common diluted share that
excludes the portion of the impairment
charges on goodwill
and intangible
assets other than MSRs allocated to the common
shareholders. The Company believes
this measure is useful to
investors, because removing the non-cash impairment
charges
provides a more
representative view of normalized operations and
the measure also
allows better comparability with peers in the industry who
also
provide a similar presentation when applicable. In addition,
management
uses this
measure internally to analyze performance.
(2) Certain amounts
in this schedule are presented net of applicable
income taxes, which are calculated
based on each subsidiary's
federal and state tax rates and laws. In general,
the federal
marginal tax rate is 35%, but
the state marginal tax rates
range from 1% to 8% in accordance with
the subsidiary's income tax filing
requirements with various tax
authorities. In addition, the effective tax
rate may differ from
the federal and state
marginal tax rates in certain
cases where a permanent difference exists.
SOURCE
SunTrust Banks, Inc.
Subject
Codes: PC/t.100722063010417, PT/lang.en, PC/ticker, IN/FIN,
SU/ERN, SU/CCA,
RE/Georgia, PC/priority.r, PC/category.f,
PC/class.1248, PC/WAVO_....k., PC/APT_....k,
PC/trade_k,
PC/wavo5_k, PC/class.1025, PC/WAVO_g....., PC/APT_g....,
PC/state_g,
PC/wavo1_g, PC/class.1278, PC/class.1000,
PC/WAVO_..b..., PC/APT_..b.., PC/circuit_b,
PC/wavo3_b,
PC/DataFeat_natl3, PC/port_32, PC/Billing_FC1,
PC/Billing_IRW,
PC/Billing_RWB, PC/Billing_TNW,
PC/Billing_US1, PC/1stAcc_830650, PC/bureau_CL,
PC/port_01, PC/port_96, PC/port_31, PC/port_33,
PC/port_19, PC/port_91, PC/contact,
PC/website,
PC/id_CL38829
Company Codes: NYSE:STI, NYSE:STI
|
