Date of Report (Date of earliest event reported): | April 24, 2014 |
Georgia | 001-08918 | 58-1575035 |
(State or other jurisdiction | (Commission File Number) | (I.R.S. Employer |
of incorporation) | Identification No.) | |
303 Peachtree Street, N.E., Atlanta, Georgia | 30308 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (404) 558-7711 |
Not Applicable | ||||
Former name or former address, if changed since last report |
99.1 | Financial data as of March 31, 2014 | |
SUNTRUST BANKS, INC. | |||||
(Registrant) | |||||
Date: | April 24, 2014 | By: /s/ Thomas E. Panther | |||
Thomas E. Panther, | |||||
Senior Vice President, Director of Corporate Finance and Controller |
• | Net income available to common shareholders was $393 million, or $0.73 per average common diluted share, compared to $413 million, or $0.77 per share, in the prior quarter. Both quarters' results included discrete items that benefited the effective tax rate. |
• | Total revenue decreased $31 million, or 2%, compared to the prior quarter. |
◦ | Net interest income declined slightly due to fewer days. |
◦ | Noninterest income decreased $23 million compared to the prior quarter driven by lower transaction-related fees and seasonally lower investment banking income, partially offset by higher mortgage-related income. Compared to the first quarter of 2013, noninterest income increased across most categories, except for the anticipated decline in mortgage production income due to lower refinance activity. |
• | Noninterest expense decreased $4 million sequentially. |
◦ | Compensation and benefits costs increased $77 million compared to the fourth quarter primarily due to the typical increase in incentive and employee benefit-related costs recognized in the first quarter. All other expense categories declined compared to the prior quarter. Compared to the first quarter of 2013, expenses were largely unchanged. |
• | Average performing loans increased $2.9 billion sequentially, or 2%, with growth concentrated in C&I, commercial real estate, and consumer loans. Average performing loans increased $8.2 billion, or 7%, compared to the first quarter of 2013 driven by broad-based growth. |
• | Average client deposits increased 1% both sequentially and from the first quarter of 2013 with the favorable mix shift toward lower-cost deposits continuing. |
• | Estimated capital ratios continued to be well above regulatory requirements. The Basel I and Basel III Tier 1 common ratios were an estimated 9.9% and 9.7%, respectively. |
• | During the quarter, the Company announced capital plans, subject to the approval of SunTrust's Board of Directors, that include: |
◦ | The purchase of up to $450 million of its common shares between the second quarter of 2014 and the first quarter of 2015. |
◦ | An increase in the quarterly common stock dividend from $0.10 per share to $0.20 per share. |
• | Book value per share was $39.44 and tangible book value per common share was $27.82, up 2% and 3%, respectively compared to December 31, 2013. The increase was primarily due to retained earnings growth. |
• | Asset quality continued to improve as nonperforming loans decreased 5% from the prior quarter and totaled 0.72% of total loans at March 31, 2014. |
• | Annualized net charge-offs decreased to 0.35% of average loans compared to 0.40% in the prior quarter, while the allowance for loan losses to total loans ratio declined slightly to 1.58%. |
• | The provision for credit losses was stable on a sequential quarter basis and declined $110 million compared to the first quarter of 2013. |
Income Statement (presented on a fully taxable-equivalent basis) | 1Q 2013 | 1Q 2014 | |||||
(Dollars in millions, except per share data) | |||||||
Net income available to common shareholders | $340 | $393 | |||||
Earnings per average common diluted share | 0.63 | 0.73 | |||||
Total revenue | 2,114 | 2,030 | |||||
Total revenue, excluding net securities gains/losses | 2,112 | 2,031 | |||||
Net interest income | 1,251 | 1,239 | |||||
Provision for credit losses | 212 | 102 | |||||
Noninterest income | 863 | 791 | |||||
Noninterest expense | 1,353 | 1,357 | |||||
Net interest margin | 3.33 | % | 3.19 | % | |||
Balance Sheet | |||||||
(Dollars in billions) | |||||||
Average loans | $120.9 | $128.5 | |||||
Average consumer and commercial deposits | 127.7 | 128.4 | |||||
Capital | |||||||
Tier 1 capital ratio(1) | 11.20 | % | 10.85 | % | |||
Common equity Tier 1 ratio(1) | 10.13 | % | 9.90 | % | |||
Total average shareholders’ equity to total average assets | 12.29 | % | 12.28 | % | |||
Asset Quality | |||||||
Net charge-offs to average loans (annualized) | 0.76 | % | 0.35 | % | |||
Allowance for loan losses to period end loans | 1.79 | % | 1.58 | % | |||
Nonperforming loans to total loans | 1.21 | % | 0.72 | % |
Three Months Ended March 31 | |||||||
2014 | 2013 | ||||||
EARNINGS & DIVIDENDS | |||||||
Net income | $405 | $352 | |||||
Net income available to common shareholders | 393 | 340 | |||||
Total revenue - FTE 1, 2 | 2,030 | 2,114 | |||||
Total revenue - FTE excluding securities (losses)/gains, net 1, 2 | 2,031 | 2,112 | |||||
Net income per average common share | |||||||
Diluted | 0.73 | 0.63 | |||||
Basic | 0.74 | 0.64 | |||||
Dividends paid per common share | 0.10 | 0.05 | |||||
CONDENSED BALANCE SHEETS | |||||||
Selected Average Balances | |||||||
Total assets | $176,971 | $171,808 | |||||
Earning assets | 157,343 | 152,471 | |||||
Loans | 128,525 | 120,882 | |||||
Intangible assets including MSRs | 7,666 | 7,379 | |||||
MSRs | 1,265 | 957 | |||||
Consumer and commercial deposits | 128,396 | 127,655 | |||||
Brokered time and foreign deposits | 2,013 | 2,170 | |||||
Total shareholders’ equity | 21,727 | 21,117 | |||||
Preferred stock | 725 | 725 | |||||
As of | |||||||
Total assets | 179,542 | 172,435 | |||||
Earning assets | 158,487 | 152,783 | |||||
Loans | 129,196 | 120,804 | |||||
Allowance for loan and lease losses | 2,040 | 2,152 | |||||
Consumer and commercial deposits | 130,933 | 127,735 | |||||
Brokered time and foreign deposits | 2,023 | 2,180 | |||||
Total shareholders’ equity | 21,817 | 21,194 | |||||
FINANCIAL RATIOS & OTHER DATA | |||||||
Return on average total assets | 0.93 | % | 0.83 | % | |||
Return on average common shareholders’ equity | 7.59 | 6.77 | |||||
Return on average tangible common shareholders' equity 1 | 10.78 | 9.88 | |||||
Net interest margin 2 | 3.19 | 3.33 | |||||
Efficiency ratio 2, 4 | 66.83 | 63.97 | |||||
Tangible efficiency ratio 1, 2, 4 | 66.65 | 63.68 | |||||
Effective tax rate 4 | 23.61 | 31.43 | |||||
Tier 1 common 3 | 9.90 | 10.13 | |||||
Tier 1 capital 3 | 10.85 | 11.20 | |||||
Total capital 3 | 12.80 | 13.45 | |||||
Tier 1 leverage 3 | 9.55 | 9.26 | |||||
Total average shareholders’ equity to total average assets | 12.28 | 12.29 | |||||
Tangible equity to tangible assets 1 | 9.01 | 9.00 | |||||
Book value per common share | $39.44 | $37.89 | |||||
Tangible book value per common share 1 | 27.82 | 26.33 | |||||
Market price: | |||||||
High | 41.26 | 29.98 | |||||
Low | 36.23 | 26.93 | |||||
Close | 39.79 | 28.81 | |||||
Market capitalization | 21,279 | 15,563 | |||||
Average common shares outstanding (000s) | |||||||
Diluted | 536,992 | 539,862 | |||||
Basic | 531,162 | 535,680 | |||||
Full-time equivalent employees | 25,925 | 26,238 | |||||
Number of ATMs | 2,243 | 2,882 | |||||
Full service banking offices | 1,501 | 1,574 | |||||
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, tier 1 capital, total capital, and tier 1 leverage ratios are estimated as of April 21, 2014. |
Three Months Ended | |||||||
March 31 | |||||||
2014 | 2013 | ||||||
Interest income | $1,336 | $1,359 | |||||
Interest expense | 132 | 138 | |||||
NET INTEREST INCOME | 1,204 | 1,221 | |||||
Provision for credit losses | 102 | 212 | |||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 1,102 | 1,009 | |||||
NONINTEREST INCOME | |||||||
Service charges on deposit accounts | 155 | 160 | |||||
Trust and investment management income | 130 | 124 | |||||
Retail investment services | 71 | 61 | |||||
Other charges and fees | 88 | 89 | |||||
Investment banking income | 88 | 68 | |||||
Trading income | 49 | 42 | |||||
Card fees | 76 | 76 | |||||
Mortgage production related income | 43 | 159 | |||||
Mortgage servicing related income | 54 | 38 | |||||
Other noninterest income | 38 | 44 | |||||
Net securities (losses)/gains | (1 | ) | 2 | ||||
Total noninterest income | 791 | 863 | |||||
NONINTEREST EXPENSE | |||||||
Employee compensation and benefits | 800 | 759 | |||||
Net occupancy expense | 86 | 89 | |||||
Outside processing and software | 170 | 178 | |||||
Equipment expense | 44 | 45 | |||||
Marketing and customer development | 25 | 30 | |||||
Amortization of intangible assets | 3 | 6 | |||||
Operating losses | 21 | 39 | |||||
FDIC premium/regulatory exams | 40 | 54 | |||||
Other noninterest expense 1 | 168 | 153 | |||||
Total noninterest expense | 1,357 | 1,353 | |||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 536 | 519 | |||||
Provision for income taxes 1 | 125 | 161 | |||||
INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 411 | 358 | |||||
Net income attributable to noncontrolling interest | 6 | 6 | |||||
NET INCOME | $405 | $352 | |||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $393 | $340 | |||||
Net interest income - FTE 2 | 1,239 | 1,251 | |||||
Net income per average common share | |||||||
Diluted | 0.73 | 0.63 | |||||
Basic | 0.74 | 0.64 | |||||
Cash dividends paid per common share | 0.10 | 0.05 | |||||
Average common shares outstanding (000s) | |||||||
Diluted | 536,992 | 539,862 | |||||
Basic | 531,162 | 535,680 | |||||
March 31 | December 31 | ||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Cash and due from banks | $6,978 | $4,258 | |||||
Federal funds sold and securities borrowed or purchased under agreements to resell | 907 | 983 | |||||
Interest-bearing deposits in other banks | 22 | 22 | |||||
Trading assets and derivatives | 4,848 | 5,040 | |||||
Securities available for sale | 23,302 | 22,542 | |||||
Loans held for sale | 1,488 | 1,699 | |||||
Loans held for investment: | |||||||
Commercial and industrial | 58,828 | 57,974 | |||||
Commercial real estate | 5,961 | 5,481 | |||||
Commercial construction | 920 | 855 | |||||
Residential mortgages - guaranteed | 3,295 | 3,416 | |||||
Residential mortgages - nonguaranteed | 24,331 | 24,412 | |||||
Residential home equity products | 14,637 | 14,809 | |||||
Residential construction | 532 | 553 | |||||
Consumer student loans - guaranteed | 5,533 | 5,545 | |||||
Consumer other direct | 3,109 | 2,829 | |||||
Consumer indirect | 11,339 | 11,272 | |||||
Consumer credit cards | 711 | 731 | |||||
Total loans held for investment | 129,196 | 127,877 | |||||
Allowance for loan and lease losses | (2,040 | ) | (2,044 | ) | |||
Net loans held for investment | 127,156 | 125,833 | |||||
Goodwill | 6,377 | 6,369 | |||||
Other intangible assets | 1,282 | 1,334 | |||||
Other real estate owned | 151 | 170 | |||||
Other assets | 7,031 | 7,085 | |||||
Total assets 1 | $179,542 | $175,335 | |||||
LIABILITIES | |||||||
Deposits: | |||||||
Noninterest-bearing consumer and commercial deposits | $39,792 | $38,800 | |||||
Interest-bearing consumer and commercial deposits: | |||||||
NOW accounts | 29,151 | 28,164 | |||||
Money market accounts | 43,196 | 41,873 | |||||
Savings | 6,217 | 5,842 | |||||
Consumer time | 8,102 | 8,475 | |||||
Other time | 4,475 | 4,581 | |||||
Total consumer and commercial deposits | 130,933 | 127,735 | |||||
Brokered time deposits | 2,023 | 2,024 | |||||
Foreign deposits | — | — | |||||
Total deposits | 132,956 | 129,759 | |||||
Funds purchased | 1,269 | 1,192 | |||||
Securities sold under agreements to repurchase | 2,133 | 1,759 | |||||
Other short-term borrowings | 5,277 | 5,788 | |||||
Long-term debt | 11,565 | 10,700 | |||||
Trading liabilities and derivatives | 1,041 | 1,181 | |||||
Other liabilities | 3,484 | 3,534 | |||||
Total liabilities | 157,725 | 153,913 | |||||
SHAREHOLDERS’ EQUITY | |||||||
Preferred stock, no par value | 725 | 725 | |||||
Common stock, $1.00 par value | 550 | 550 | |||||
Additional paid in capital | 9,107 | 9,115 | |||||
Retained earnings | 12,278 | 11,936 | |||||
Treasury stock, at cost, and other | (643 | ) | (615 | ) | |||
Accumulated other comprehensive (loss)/income | (200 | ) | (289 | ) | |||
Total shareholders’ equity | 21,817 | 21,422 | |||||
Total liabilities and shareholders’ equity | $179,542 | $175,335 | |||||
Common shares outstanding | 534,780 | 536,097 | |||||
Common shares authorized | 750,000 | 750,000 | |||||
Preferred shares outstanding | 7 | 7 | |||||
Preferred shares authorized | 50,000 | 50,000 | |||||
Treasury shares of common stock | 15,141 | 13,824 |
SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS EARNED AND RATES PAID (Dollars in millions; yields on taxable-equivalent basis) (Unaudited) | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 31, 2014 | March 31, 2013 | ||||||||||||||||||||
Average Balances | Interest Income/ Expense | Yields/ Rates | Average Balances | Interest Income/ Expense | Yields/ Rates | ||||||||||||||||
ASSETS | |||||||||||||||||||||
Loans: | |||||||||||||||||||||
Commercial and industrial - FTE 1 | $58,287 | $538 | 3.74 | % | $53,763 | $556 | 4.20 | % | |||||||||||||
Commercial real estate | 5,616 | 41 | 2.93 | 4,092 | 35 | 3.50 | |||||||||||||||
Commercial construction | 894 | 7 | 3.31 | 663 | 6 | 3.75 | |||||||||||||||
Residential mortgages - guaranteed | 3,351 | 30 | 3.62 | 4,079 | 27 | 2.62 | |||||||||||||||
Residential mortgages - nonguaranteed | 23,933 | 242 | 4.05 | 22,386 | 238 | 4.25 | |||||||||||||||
Home equity products | 14,516 | 129 | 3.59 | 14,363 | 129 | 3.64 | |||||||||||||||
Residential construction | 485 | 5 | 4.40 | 615 | 7 | 4.61 | |||||||||||||||
Guaranteed student loans | 5,523 | 50 | 3.70 | 5,397 | 52 | 3.92 | |||||||||||||||
Other direct | 2,959 | 31 | 4.25 | 2,398 | 26 | 4.43 | |||||||||||||||
Indirect | 11,299 | 91 | 3.25 | 10,996 | 96 | 3.53 | |||||||||||||||
Credit cards | 716 | 17 | 9.56 | 617 | 15 | 9.52 | |||||||||||||||
Nonaccrual | 946 | 5 | 1.98 | 1,513 | 11 | 2.91 | |||||||||||||||
Total loans | 128,525 | 1,186 | 3.74 | 120,882 | 1,198 | 4.02 | |||||||||||||||
Securities available for sale: | |||||||||||||||||||||
Taxable | 22,422 | 150 | 2.68 | 22,209 | 140 | 2.53 | |||||||||||||||
Tax-exempt - FTE 1 | 264 | 3 | 5.25 | 294 | 4 | 5.22 | |||||||||||||||
Total securities available for sale | 22,686 | 153 | 2.71 | 22,503 | 144 | 2.57 | |||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell | 978 | — | — | 1,092 | — | 0.04 | |||||||||||||||
Loans held for sale | 1,450 | 15 | 4.05 | 3,752 | 31 | 3.29 | |||||||||||||||
Interest-bearing deposits | 22 | — | 0.13 | 21 | — | 0.13 | |||||||||||||||
Interest earning trading assets | 3,682 | 17 | 1.87 | 4,221 | 16 | 1.53 | |||||||||||||||
Total earning assets | 157,343 | 1,371 | 3.53 | 152,471 | 1,389 | 3.70 | |||||||||||||||
Allowance for loan and lease losses | (2,037 | ) | (2,178 | ) | |||||||||||||||||
Cash and due from banks | 5,436 | 4,462 | |||||||||||||||||||
Other assets | 14,827 | 14,300 | |||||||||||||||||||
Noninterest earning trading assets and derivatives | 1,299 | 1,959 | |||||||||||||||||||
Unrealized gains on securities available for sale, net | 103 | 794 | |||||||||||||||||||
Total assets | $176,971 | $171,808 | |||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
NOW accounts | $27,707 | $5 | 0.07 | % | $26,383 | $5 | 0.08 | % | |||||||||||||
Money market accounts | 42,755 | 13 | 0.12 | 42,995 | 15 | 0.15 | |||||||||||||||
Savings | 6,035 | — | 0.04 | 5,527 | 1 | 0.06 | |||||||||||||||
Consumer time | 8,318 | 22 | 1.08 | 9,421 | 27 | 1.16 | |||||||||||||||
Other time | 4,533 | 13 | 1.19 | 5,245 | 18 | 1.37 | |||||||||||||||
Total interest-bearing consumer and commercial deposits | 89,348 | 53 | 0.24 | 89,571 | 66 | 0.30 | |||||||||||||||
Brokered time deposits | 2,012 | 12 | 2.31 | 2,087 | 13 | 2.61 | |||||||||||||||
Foreign deposits | 1 | — | 0.60 | 83 | — | 0.15 | |||||||||||||||
Total interest-bearing deposits | 91,361 | 65 | 0.29 | 91,741 | 79 | 0.35 | |||||||||||||||
Funds purchased | 989 | — | 0.08 | 716 | — | 0.11 | |||||||||||||||
Securities sold under agreements to repurchase | 2,202 | 1 | 0.10 | 1,705 | 1 | 0.19 | |||||||||||||||
Interest-bearing trading liabilities | 699 | 5 | 2.74 | 723 | 4 | 2.21 | |||||||||||||||
Other short-term borrowings | 5,588 | 3 | 0.24 | 3,721 | 3 | 0.29 | |||||||||||||||
Long-term debt | 11,367 | 58 | 2.05 | 9,357 | 51 | 2.22 | |||||||||||||||
Total interest-bearing liabilities | 112,206 | 132 | 0.48 | 107,963 | 138 | 0.52 | |||||||||||||||
Noninterest-bearing deposits | 39,048 | 38,084 | |||||||||||||||||||
Other liabilities | 3,524 | 4,016 | |||||||||||||||||||
Noninterest-bearing trading liabilities and derivatives | 466 | 628 | |||||||||||||||||||
Shareholders’ equity | 21,727 | 21,117 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $176,971 | $171,808 | |||||||||||||||||||
Interest Rate Spread | 3.05 | % | 3.17 | % | |||||||||||||||||
Net Interest Income - FTE 1 | $1,239 | $1,251 | |||||||||||||||||||
Net Interest Margin 2 | 3.19 | % | 3.33 | % | |||||||||||||||||
SunTrust Banks, Inc. and Subsidiaries OTHER FINANCIAL DATA (Dollars in millions) (Unaudited) | |||||||
Three Months Ended March 31 | |||||||
2014 | 2013 | ||||||
CREDIT DATA | |||||||
Allowance for credit losses - beginning | $2,094 | $2,219 | |||||
(Benefit)/provision for unfunded commitments | (4 | ) | 8 | ||||
Provision for loan losses: | |||||||
Commercial | 39 | 64 | |||||
Residential | 48 | 112 | |||||
Consumer | 19 | 28 | |||||
Total provision for loan losses | 106 | 204 | |||||
Charge-offs: | |||||||
Commercial | (33 | ) | (60 | ) | |||
Residential | (85 | ) | (178 | ) | |||
Consumer | (33 | ) | (35 | ) | |||
Total charge-offs | (151 | ) | (273 | ) | |||
Recoveries: | |||||||
Commercial | 14 | 15 | |||||
Residential | 17 | 22 | |||||
Consumer | 10 | 10 | |||||
Total recoveries | 41 | 47 | |||||
Net charge-offs | (110 | ) | (226 | ) | |||
Allowance for credit losses - ending | $2,086 | $2,205 | |||||
Components: | |||||||
Allowance for loan and lease losses | $2,040 | $2,152 | |||||
Unfunded commitments reserve | 46 | 53 | |||||
Allowance for credit losses | $2,086 | $2,205 | |||||
Net charge-offs to average loans (annualized): | |||||||
Commercial | 0.12 | % | 0.32 | % | |||
Residential | 0.64 | 1.48 | |||||
Consumer | 0.47 | 0.52 | |||||
Total net charge-offs to total average loans | 0.35 | % | 0.76 | % | |||
Period Ended | March 31, 2014 | December 31, 2013 | |||||
Nonaccrual/nonperforming loans: | |||||||
Commercial | $229 | $247 | |||||
Residential | 684 | 712 | |||||
Consumer | 12 | 12 | |||||
Total nonaccrual/nonperforming loans | 925 | 971 | |||||
Other real estate owned (“OREO”) | 151 | 170 | |||||
Other repossessed assets | 7 | 7 | |||||
Nonperforming loans held for sale ("LHFS") | 12 | 17 | |||||
Total nonperforming assets | $1,095 | $1,165 | |||||
Accruing restructured loans | $2,783 | $2,749 | |||||
Nonaccruing restructured loans | 358 | 391 | |||||
Accruing loans past due > 90 days (guaranteed) | 1,095 | 1,180 | |||||
Accruing loans past due > 90 days (non-guaranteed) | 42 | 48 | |||||
Accruing LHFS past due > 90 days | 1 | — | |||||
Nonperforming loans to total loans | 0.72 | % | 0.76 | % | |||
Nonperforming assets to total loans plus OREO, other repossessed assets, and nonperforming LHFS | 0.85 | 0.91 | |||||
Allowance to period-end loans 1,2 | 1.58 | 1.60 | |||||
Allowance to period-end loans, excluding government guaranteed loans 1,2,3 | 1.70 | 1.72 | |||||
Allowance to nonperforming loans 1,2 | 223 | 212 | |||||
Allowance to annualized net charge-offs 1 | 4.56x | 4.03x | |||||
SunTrust Banks, Inc. and Subsidiaries OTHER FINANCIAL DATA, continued (Dollars in millions) (Unaudited) | |||||||||||||||
Three Months Ended March 31 | |||||||||||||||
Core Deposit Intangibles | MSRs - Fair Value | Other | Total | ||||||||||||
OTHER INTANGIBLE ASSET ROLLFORWARD | |||||||||||||||
Balance, beginning of period | $17 | $899 | $40 | $956 | |||||||||||
Amortization | (3 | ) | — | (3 | ) | (6 | ) | ||||||||
Mortgage servicing rights (“MSRs”) originated | — | 110 | — | 110 | |||||||||||
Fair value changes due to inputs and assumptions 1 | — | 90 | — | 90 | |||||||||||
Other changes in fair value 2 | — | (74 | ) | — | (74 | ) | |||||||||
Balance, March 31, 2013 | $14 | $1,025 | $37 | $1,076 | |||||||||||
Balance, beginning of period | $4 | $1,300 | $30 | $1,334 | |||||||||||
Amortization | (1 | ) | — | (2 | ) | (3 | ) | ||||||||
MSRs originated | — | 32 | — | 32 | |||||||||||
Fair value changes due to inputs and assumptions 1 | — | (46 | ) | — | (46 | ) | |||||||||
Other changes in fair value 2 | — | (35 | ) | — | (35 | ) | |||||||||
Balance, March 31, 2014 | $3 | $1,251 | $28 | $1,282 |
SunTrust Banks, Inc. and Subsidiaries RECONCILEMENT OF NON-GAAP MEASURES APPENDIX A TO THE FINANCIAL INFORMATION (Dollars in millions, except per share data) (Unaudited) | |||||||
Three Months Ended | |||||||
March 31 | March 31 | ||||||
2014 | 2013 | ||||||
NON-GAAP MEASURES PRESENTED IN THE FINANCIAL INFORMATION 1 | |||||||
Net interest income | $1,204 | $1,221 | |||||
Taxable-equivalent adjustment | 35 | 30 | |||||
Net interest income - FTE | 1,239 | 1,251 | |||||
Noninterest income | 791 | 863 | |||||
Total revenue - FTE | 2,030 | 2,114 | |||||
Securities losses/(gains), net | 1 | (2 | ) | ||||
Total revenue - FTE excluding net securities (losses)/gains 2 | $2,031 | $2,112 | |||||
Noninterest income | $791 | $863 | |||||
Securities losses/(gains), net | 1 | (2 | ) | ||||
Noninterest income excluding net securities (losses)/gains 2 | $792 | $861 | |||||
Return on average common shareholders’ equity | 7.59 | % | 6.77 | % | |||
Effect of removing average intangible assets, excluding MSRs | 3.19 | 3.11 | |||||
Return on average tangible common shareholders' equity 3 | 10.78 | % | 9.88 | % | |||
Efficiency ratio 4, 9 | 66.83 | % | 63.97 | % | |||
Impact of excluding amortization of intangible assets | (0.18 | ) | (0.29 | ) | |||
Tangible efficiency ratio 5, 9 | 66.65 | % | 63.68 | % | |||
March 31 | December 31 | ||||||
2014 | 2013 | ||||||
Total shareholders' equity | $21,817 | $21,422 | |||||
Goodwill, net of deferred taxes of $193 million and $186 million, respectively | (6,184 | ) | (6,183 | ) | |||
Other intangible assets, net of deferred taxes of $1 million and $2 million, respectively, and MSRs | (1,281 | ) | (1,332 | ) | |||
MSRs | 1,251 | 1,300 | |||||
Tangible equity | 15,603 | 15,207 | |||||
Preferred stock | (725 | ) | (725 | ) | |||
Tangible common equity | $14,878 | $14,482 | |||||
Total assets | $179,542 | $175,335 | |||||
Goodwill | (6,377 | ) | (6,369 | ) | |||
Other intangible assets including MSRs | (1,282 | ) | (1,334 | ) | |||
MSRs | 1,251 | 1,300 | |||||
Tangible assets | $173,134 | $168,932 | |||||
Tangible equity to tangible assets 6 | 9.01 | % | 9.00 | % | |||
Tangible book value per common share 7 | $27.82 | $27.01 | |||||
Total loans | $129,196 | $127,877 | |||||
Government guaranteed loans | (8,828 | ) | (8,961 | ) | |||
Loans held at fair value | (299 | ) | (302 | ) | |||
Total loans, excluding government guaranteed and fair value loans | $120,069 | $118,614 | |||||
Allowance to total loans, excluding government guaranteed and fair value loans 8 | 1.70 | % | 1.72 | % |
SunTrust Banks, Inc. and Subsidiaries CONSUMER BANKING AND PRIVATE WEALTH MANAGEMENT (Dollars in millions) (Unaudited) | |||||||
Three Months Ended March 31 1 | |||||||
2014 | 2013 | ||||||
Statements of Income: | |||||||
Net interest income | $641 | $649 | |||||
FTE adjustment | — | — | |||||
Net interest income - FTE | 641 | 649 | |||||
Provision for credit losses 2 | 53 | 92 | |||||
Net interest income - FTE - after provision for credit losses | 588 | 557 | |||||
Noninterest income before securities gains/(losses) | 361 | 357 | |||||
Securities gains/(losses), net | — | — | |||||
Total noninterest income | 361 | 357 | |||||
Noninterest expense before amortization of intangible assets | 707 | 699 | |||||
Amortization of intangible assets | 2 | 5 | |||||
Total noninterest expense | 709 | 704 | |||||
Income - FTE - before provision for income taxes | 240 | 210 | |||||
Provision for income taxes | 88 | 77 | |||||
FTE adjustment | — | — | |||||
Net income including income attributable to noncontrolling interest | 152 | 133 | |||||
Less: net income attributable to noncontrolling interest | — | — | |||||
Net income | $152 | $133 | |||||
Total revenue - FTE | $1,002 | $1,006 | |||||
Selected Average Balances: | |||||||
Total loans | $41,262 | $40,332 | |||||
Goodwill | 4,262 | 3,955 | |||||
Other intangible assets excluding MSRs | 22 | 41 | |||||
Total assets | 46,943 | 45,376 | |||||
Consumer and commercial deposits | 84,550 | 85,012 | |||||
Other Information (End of Period): | |||||||
Managed (discretionary) assets | $49,944 | $52,934 | |||||
Non-managed assets | 55,039 | 52,190 | |||||
Total assets under administration | 104,983 | 105,124 | |||||
Brokerage assets | 44,398 | 41,257 | |||||
Total assets under advisement | $149,381 | $146,381 | |||||
1 | Prior year results have been restated to include the effect of moving small business banking from Wholesale Banking to Consumer Banking and Private Wealth Management during the second quarter of 2013. |
2 | Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances. |
SunTrust Banks, Inc. and Subsidiaries WHOLESALE BANKING (Dollars in millions) (Unaudited) | |||||||
Three Months Ended March 31 1 | |||||||
2014 | 2013 | ||||||
Statements of Income: | |||||||
Net interest income | $403 | $389 | |||||
FTE adjustment | 34 | 29 | |||||
Net interest income - FTE | 437 | 418 | |||||
Provision for credit losses 2 | 23 | 56 | |||||
Net interest income - FTE - after provision for credit losses | 414 | 362 | |||||
Noninterest income before securities gains/(losses) | 322 | 306 | |||||
Securities gains/(losses), net | — | — | |||||
Total noninterest income | 322 | 306 | |||||
Noninterest expense before amortization of intangible assets | 454 | 379 | |||||
Amortization of intangible assets | 1 | 1 | |||||
Total noninterest expense | 455 | 380 | |||||
Income - FTE - before provision for income taxes | 281 | 288 | |||||
Provision for income taxes | 57 | 64 | |||||
FTE adjustment | 34 | 29 | |||||
Net income including income attributable to noncontrolling interest | 190 | 195 | |||||
Less: net income attributable to noncontrolling interest | 1 | 4 | |||||
Net income | $189 | $191 | |||||
Total revenue - FTE | $759 | $724 | |||||
Selected Average Balances: | |||||||
Total loans | $58,934 | $52,494 | |||||
Goodwill | 2,107 | 2,414 | |||||
Other intangible assets excluding MSRs | 10 | 12 | |||||
Total assets | 70,467 | 65,407 | |||||
Consumer and commercial deposits | 42,094 | 39,115 | |||||
Other Information (End of Period): 3 | |||||||
Managed (discretionary) assets | $45,010 | $44,620 | |||||
Non-managed assets | — | — | |||||
Total assets under administration | 45,010 | 44,620 | |||||
Total assets under advisement | $45,010 | $44,620 | |||||
1 | Prior year results have been restated to include the effect of moving small business banking from Wholesale Banking to Consumer Banking and Private Wealth Management during the second quarter of 2013. |
SunTrust Banks, Inc. and Subsidiaries MORTGAGE BANKING (Dollars in millions) (Unaudited) | |||||||
Three Months Ended March 31 | |||||||
2014 | 2013 | ||||||
Statements of Income: | |||||||
Net interest income | $134 | $127 | |||||
FTE adjustment | — | — | |||||
Net interest income - FTE | 134 | 127 | |||||
Provision for credit losses 1 | 26 | 64 | |||||
Net interest income - FTE - after provision for credit losses | 108 | 63 | |||||
Noninterest income before securities gains/(losses) | 100 | 198 | |||||
Securities gains/(losses), net | — | — | |||||
Total noninterest income | 100 | 198 | |||||
Noninterest expense before amortization of intangible assets | 187 | 269 | |||||
Amortization of intangible assets | — | — | |||||
Total noninterest expense | 187 | 269 | |||||
Income/(loss) - FTE - before provision/(benefit) for income taxes | 21 | (8 | ) | ||||
Provision/(benefit) for income taxes | 6 | (4 | ) | ||||
FTE adjustment | — | — | |||||
Net income/(loss) including income attributable to noncontrolling interest | 15 | (4 | ) | ||||
Less: net income attributable to noncontrolling interest | — | — | |||||
Net income/(loss) | $15 | ($4 | ) | ||||
Total revenue - FTE | $234 | $325 | |||||
Selected Average Balances: | |||||||
Total loans | $28,287 | $27,996 | |||||
Goodwill | — | — | |||||
Other intangible assets excluding MSRs | — | — | |||||
Total assets | 31,550 | 33,185 | |||||
Consumer and commercial deposits | 1,887 | 3,517 | |||||
Mortgage Servicing Data (End of Period): | |||||||
Total loans serviced | $135,180 | $142,203 | |||||
Total loans serviced for others | 105,746 | 111,973 |
1 | Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances. |
SunTrust Banks, Inc. and Subsidiaries CORPORATE OTHER (Dollars in millions) (Unaudited) | |||||||
Three Months Ended March 31 | |||||||
2014 | 2013 | ||||||
Statements of Income: | |||||||
Net interest income | $26 | $56 | |||||
FTE adjustment | 1 | 1 | |||||
Net interest income - FTE | 27 | 57 | |||||
Provision for credit losses | — | — | |||||
Net interest income - FTE - after provision for credit losses | 27 | 57 | |||||
Noninterest income before securities (losses)/gains | 9 | — | |||||
Securities (losses)/gains, net | (1 | ) | 2 | ||||
Total noninterest income | 8 | 2 | |||||
Noninterest expense before amortization of intangible assets | 6 | — | |||||
Amortization of intangible assets | — | — | |||||
Total noninterest expense | 6 | — | |||||
Income - FTE - before (benefit)/provision for income taxes | 29 | 59 | |||||
(Benefit)/provision for income taxes | (26 | ) | 24 | ||||
FTE adjustment | 1 | 1 | |||||
Net income including income attributable to noncontrolling interest | 54 | 34 | |||||
Less: net income attributable to noncontrolling interest | 5 | 2 | |||||
Net income | $49 | $32 | |||||
Total revenue - FTE | $35 | $59 | |||||
Selected Average Balances: | |||||||
Total loans | $42 | $60 | |||||
Securities available for sale | 22,585 | 22,315 | |||||
Other intangible assets excluding MSRs | — | — | |||||
Total assets | 28,011 | 27,840 | |||||
Consumer and commercial deposits | (135 | ) | 11 | ||||