Date of Report (Date of earliest event reported): | January 25, 2017 |
Georgia | 001-08918 | 58-1575035 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
303 Peachtree Street, N.E., Atlanta, Georgia | 30308 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (800) 786-8787 |
Not Applicable | ||||
Former name or former address, if changed since last report |
99.1 | Financial data as of December 31, 2016 | |
SUNTRUST BANKS, INC. | |||||
(Registrant) | |||||
Date: | January 25, 2017 | By: /s/ Thomas E. Panther | |||
Thomas E. Panther, | |||||
Senior Vice President, Director of Corporate Finance and Controller |
• | Net income available to common shareholders was $448 million, or $0.90 per average common diluted share, compared to $0.91 for the prior quarter and $0.91 for the fourth quarter of 2015. |
• | Total revenue decreased 2% compared to the prior quarter and increased 7% compared to the fourth quarter of 2015. |
◦ | The sequential decline was driven by lower noninterest income (primarily mortgage-related), which was partially offset by higher net interest income. |
◦ | Compared to the fourth quarter of 2015, revenue growth was driven by increases in both net interest income and noninterest income. |
• | Net interest margin was 3.00% in the current quarter, up 4 basis points sequentially and up 2 basis points compared to the prior year quarter driven by higher earning asset yields and continued positive mix shift in the loan portfolio. |
• | Provision for credit losses increased $4 million sequentially and $50 million compared to the fourth quarter of 2015 due to higher net charge-offs. |
• | Noninterest expense declined 1% sequentially and increased 8% compared to the prior year quarter. |
◦ | The sequential decrease was driven by reductions across most expense categories, partially offset by higher legal and consulting fees tied to business improvement initiatives and higher marketing and customer development costs. |
◦ | Compared to the prior year quarter, the increase was driven by ongoing, strategic investments, higher compensation associated with improved business performance, investments in technology, and higher regulatory and compliance costs. |
• | The efficiency and tangible efficiency ratios in the current quarter were 63.7% and 63.1%, respectively, and were 62.6% and 62.0%, respectively, on a full year basis. |
◦ | The full year efficiency and tangible efficiency ratios improved by 58 and 65 basis points, respectively, compared to 2015, driven by positive operating leverage. |
• | Average loan balances increased $321 million sequentially, driven by growth in consumer loans, and 5% compared to the fourth quarter of 2015, due to broad-based growth across most asset classes. |
◦ | Average sequential loan growth was impacted by a $1 billion auto loan sale in the latter part of the prior quarter. Period-end loan balances increased $1.8 billion, or 1%. |
• | Average consumer and commercial deposits increased 2% sequentially and 7% compared to the fourth quarter of 2015, driven by continued success in deepening client relationships. |
• | Estimated capital ratios continue to be well above regulatory requirements. The Common Equity Tier 1 ("CET1") ratio was estimated to be 9.6% as of December 31, 2016, and 9.4% on a fully phased-in basis. |
• | During the quarter, the Company repurchased $240 million of its outstanding common stock in accordance with its 2016 capital plan. |
• | Book value per common share was $45.38 and tangible book value per common share was $32.95, down 3% and 4%, respectively, from September 30, 2016, given the decline in accumulated other comprehensive income (AOCI) due to the increase in long-term rates. |
• | Nonperforming loans decreased $104 million from the prior quarter and represented 0.59% of total loans at December 31, 2016. |
• | Net charge-offs for the current quarter were $136 million, or 0.38% of average loans on an annualized basis, up $10 million compared to the prior quarter. |
• | The provision for credit losses increased $4 million sequentially due primarily to higher net charge-offs and increased loan growth, largely offset by a lower energy-related provision expense. |
• | At December 31, 2016, the ALLL to period-end loans ratio declined 4 basis points from the prior quarter driven by the resolution of problem energy credits. |
Income Statement (Dollars in millions, except per share data) | 4Q 2016 | 3Q 2016 | 2Q 2016 | 1Q 2016 | 4Q 2015 | ||||||||||||||
Net interest income | $1,343 | $1,308 | $1,288 | $1,282 | $1,246 | ||||||||||||||
Net interest income-FTE 2 | 1,377 | 1,342 | 1,323 | 1,318 | 1,281 | ||||||||||||||
Net interest margin | 2.93 | % | 2.88 | % | 2.91 | % | 2.96 | % | 2.90 | % | |||||||||
Net interest margin-FTE 2 | 3.00 | 2.96 | 2.99 | 3.04 | 2.98 | ||||||||||||||
Noninterest income | $815 | $889 | $898 | $781 | $765 | ||||||||||||||
Total revenue | 2,158 | 2,197 | 2,186 | 2,063 | 2,011 | ||||||||||||||
Total revenue-FTE 2 | 2,192 | 2,231 | 2,221 | 2,099 | 2,046 | ||||||||||||||
Noninterest expense | 1,397 | 1,409 | 1,345 | 1,318 | 1,288 | ||||||||||||||
Provision for credit losses | 101 | 97 | 146 | 101 | 51 | ||||||||||||||
Net income available to common shareholders | 448 | 457 | 475 | 430 | 467 | ||||||||||||||
Earnings per average common diluted share | 0.90 | 0.91 | 0.94 | 0.84 | 0.91 | ||||||||||||||
Balance Sheet (Dollars in billions) | |||||||||||||||||||
Average loans | $142.6 | $142.3 | $141.2 | $138.4 | $135.2 | ||||||||||||||
Average consumer and commercial deposits | 158.0 | 155.3 | 154.2 | 149.2 | 148.2 | ||||||||||||||
Capital | |||||||||||||||||||
Capital ratios at period end 1 : | |||||||||||||||||||
Tier 1 capital (transitional) | 10.28 | % | 10.50 | % | 10.57 | % | 10.63 | % | 10.80 | % | |||||||||
Common Equity Tier 1 ("CET1") (transitional) | 9.59 | 9.78 | 9.84 | 9.90 | 9.96 | ||||||||||||||
Common Equity Tier 1 ("CET1") (fully phased-in) 2 | 9.43 | 9.66 | 9.73 | 9.77 | 9.80 | ||||||||||||||
Total average shareholders’ equity to total average assets | 11.84 | 12.12 | 12.11 | 12.33 | 12.43 | ||||||||||||||
Asset Quality | |||||||||||||||||||
Net charge-offs to average loans (annualized) | 0.38 | % | 0.35 | % | 0.39 | % | 0.25 | % | 0.24 | % | |||||||||
Allowance for loan and lease losses to period-end loans | 1.19 | 1.23 | 1.25 | 1.27 | 1.29 | ||||||||||||||
Nonperforming loans to total loans | 0.59 | 0.67 | 0.67 | 0.70 | 0.49 |
• | The Company presents the allowance for loan and lease losses excluding government-guaranteed loans and fair value loans, and early-stage delinquencies excluding government-guaranteed loans and fair value loans. The Company believes that the exclusion of loans that are held at fair value with no related allowance, and loans guaranteed by a government agency that do not have an associated allowance recorded due to nominal risk of principal loss, better depicts the allowance relative to loans the allowance is intended to cover. |
• | The Company presents certain capital information on a tangible basis, including tangible equity, tangible common equity, the ratio of tangible equity to tangible assets, the ratio of tangible common equity to tangible assets, tangible book value per share, and the return on tangible common shareholders’ equity, which removes the after-tax impact of purchase accounting intangible assets from shareholders' equity and removes related intangible asset amortization from net income available to common shareholders. The Company believes these measures are useful to investors because, by removing the amount of intangible assets that result from merger and acquisition activity and amortization expense (the level of which may vary from company to company), it allows investors to more easily compare the Company’s capital position and return on average tangible common shareholders' equity to other companies in the industry who present similar measures. The Company also believes that removing these items provides a more relevant measure of the return on the Company's common shareholders' equity. These measures are utilized by management to assess the capital adequacy and profitability of the Company. |
• | Similarly, the Company presents an efficiency ratio-FTE and a tangible efficiency ratio-FTE. The efficiency ratio is computed by dividing noninterest expense by total revenue. Efficiency ratio-FTE is computed by dividing noninterest expense by total revenue-FTE. The tangible efficiency ratio-FTE excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (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. |
• | The Company presents the Basel III Common Equity Tier 1 (CET1), on a fully-phased in basis. Fully phased-in ratios consider a 250% risk-weighting for MSRs and deduction from capital of certain carryforward DTAs, the overfunded pension asset, and other intangible assets. The Company believes this measure is useful to investors who wish to understand the Company's current compliance with future regulatory requirements. |
(Dollars in millions and shares in thousands, except per share data) (Unaudited) | Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
EARNINGS & DIVIDENDS | |||||||||||||||
Net income | $465 | $484 | $1,878 | $1,933 | |||||||||||
Net income available to common shareholders | 448 | 467 | 1,811 | 1,863 | |||||||||||
Total revenue | 2,158 | 2,011 | 8,604 | 8,032 | |||||||||||
Total revenue-FTE 1 | 2,192 | 2,046 | 8,742 | 8,174 | |||||||||||
Net income per average common share: | |||||||||||||||
Diluted | 0.90 | 0.91 | 3.60 | 3.58 | |||||||||||
Basic | 0.91 | 0.92 | 3.63 | 3.62 | |||||||||||
Dividends paid per common share | 0.26 | 0.24 | 1.00 | 0.92 | |||||||||||
CONDENSED BALANCE SHEETS | |||||||||||||||
Selected Average Balances: | |||||||||||||||
Total assets | $203,146 | $189,656 | $199,004 | $188,892 | |||||||||||
Earning assets | 182,475 | 170,262 | 178,825 | 168,813 | |||||||||||
Loans | 142,578 | 135,214 | 141,118 | 133,558 | |||||||||||
Intangible assets including mortgage servicing rights ("MSRs") | 7,654 | 7,629 | 7,545 | 7,604 | |||||||||||
MSRs | 1,291 | 1,273 | 1,190 | 1,250 | |||||||||||
Consumer and commercial deposits | 157,996 | 148,163 | 154,189 | 144,202 | |||||||||||
Total shareholders’ equity | 24,044 | 23,583 | 24,068 | 23,346 | |||||||||||
Preferred stock | 1,225 | 1,225 | 1,225 | 1,225 | |||||||||||
Period End Balances: | |||||||||||||||
Total assets | 204,875 | 190,817 | |||||||||||||
Earning assets | 184,610 | 172,114 | |||||||||||||
Loans | 143,298 | 136,442 | |||||||||||||
Allowance for loan and lease losses ("ALLL") | 1,709 | 1,752 | |||||||||||||
Consumer and commercial deposits | 158,864 | 148,921 | |||||||||||||
Total shareholders’ equity | 23,618 | 23,437 | |||||||||||||
FINANCIAL RATIOS & OTHER DATA | |||||||||||||||
Return on average total assets | 0.91 | % | 1.01 | % | 0.94 | % | 1.02 | % | |||||||
Return on average common shareholders’ equity 2 | 7.85 | 8.32 | 7.97 | 8.46 | |||||||||||
Return on average tangible common shareholders' equity 1, 2 | 10.76 | 11.49 | 10.91 | 11.75 | |||||||||||
Net interest margin | 2.93 | 2.90 | 2.92 | 2.82 | |||||||||||
Net interest margin-FTE 1 | 3.00 | 2.98 | 3.00 | 2.91 | |||||||||||
Efficiency ratio | 64.74 | 64.05 | 63.55 | 64.24 | |||||||||||
Efficiency ratio-FTE 1 | 63.73 | 62.96 | 62.55 | 63.13 | |||||||||||
Tangible efficiency ratio-FTE 1 | 63.08 | 62.11 | 61.99 | 62.64 | |||||||||||
Effective tax rate | 29 | 28 | 30 | 28 | |||||||||||
Basel III capital ratios at period end (transitional) 3: | |||||||||||||||
Common Equity Tier 1 ("CET1") | 9.59 | 9.96 | |||||||||||||
Tier 1 capital | 10.28 | 10.80 | |||||||||||||
Total capital | 12.26 | 12.54 | |||||||||||||
Leverage | 9.22 | 9.69 | |||||||||||||
Basel III fully phased-in CET1 ratio 1, 3 | 9.43 | 9.80 | |||||||||||||
Total average shareholders’ equity to total average assets | 11.84 | % | 12.43 | % | 12.09 | % | 12.36 | % | |||||||
Tangible equity to tangible assets 1 | 8.82 | 9.40 | |||||||||||||
Tangible common equity to tangible assets 1 | 8.15 | 8.67 | |||||||||||||
Book value per common share 2 | $45.38 | $43.45 | |||||||||||||
Tangible book value per common share 1, 2 | 32.95 | 31.45 | |||||||||||||
Market capitalization | 26,942 | 21,793 | |||||||||||||
Average common shares outstanding: | |||||||||||||||
Diluted | 497,055 | 514,507 | 503,466 | 520,586 | |||||||||||
Basic | 491,497 | 508,536 | 498,638 | 514,844 | |||||||||||
Full-time equivalent employees | 24,375 | 24,043 | |||||||||||||
Number of ATMs | 2,165 | 2,160 | |||||||||||||
Full service banking offices | 1,367 | 1,401 | |||||||||||||
1 | See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures. |
2 | Beginning January 1, 2016, noncontrolling interest was removed from common shareholders' equity in the calculation to provide a more accurate measure of the Company's return on common shareholders' equity and book value per common share. Accordingly, amounts for periods prior to January 1, 2016 have been updated for consistent presentation. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
(Dollars in millions and shares in thousands, except per share data) (Unaudited) | December 31 | December 31 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Interest income | $1,492 | $1,363 | $5,778 | $5,265 | |||||||||||
Interest expense | 149 | 117 | 557 | 501 | |||||||||||
NET INTEREST INCOME | 1,343 | 1,246 | 5,221 | 4,764 | |||||||||||
Provision for credit losses | 101 | 51 | 444 | 165 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 1,242 | 1,195 | 4,777 | 4,599 | |||||||||||
NONINTEREST INCOME | |||||||||||||||
Service charges on deposit accounts | 154 | 156 | 630 | 622 | |||||||||||
Other charges and fees | 90 | 92 | 380 | 377 | |||||||||||
Card fees | 84 | 82 | 327 | 329 | |||||||||||
Investment banking income | 122 | 104 | 494 | 461 | |||||||||||
Trading income | 58 | 42 | 211 | 181 | |||||||||||
Trust and investment management income | 73 | 79 | 304 | 334 | |||||||||||
Retail investment services | 69 | 71 | 281 | 300 | |||||||||||
Mortgage production related income | 78 | 53 | 366 | 270 | |||||||||||
Mortgage servicing related income | 25 | 56 | 189 | 169 | |||||||||||
Net securities gains | — | — | 4 | 21 | |||||||||||
Other noninterest income | 62 | 30 | 197 | 204 | |||||||||||
Total noninterest income | 815 | 765 | 3,383 | 3,268 | |||||||||||
NONINTEREST EXPENSE | |||||||||||||||
Employee compensation and benefits | 762 | 690 | 3,071 | 2,942 | |||||||||||
Outside processing and software | 209 | 222 | 834 | 815 | |||||||||||
Net occupancy expense | 94 | 86 | 349 | 341 | |||||||||||
Equipment expense | 43 | 41 | 170 | 164 | |||||||||||
FDIC premium/regulatory exams | 46 | 35 | 173 | 139 | |||||||||||
Marketing and customer development | 52 | 48 | 172 | 151 | |||||||||||
Operating losses | 23 | 22 | 108 | 56 | |||||||||||
Amortization | 14 | 17 | 49 | 40 | |||||||||||
Other noninterest expense | 154 | 127 | 542 | 512 | |||||||||||
Total noninterest expense | 1,397 | 1,288 | 5,468 | 5,160 | |||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 660 | 672 | 2,692 | 2,707 | |||||||||||
Provision for income taxes | 193 | 185 | 805 | 764 | |||||||||||
NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 467 | 487 | 1,887 | 1,943 | |||||||||||
Net income attributable to noncontrolling interest | 2 | 3 | 9 | 10 | |||||||||||
NET INCOME | $465 | $484 | $1,878 | $1,933 | |||||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $448 | $467 | $1,811 | $1,863 | |||||||||||
Net interest income-FTE 1 | 1,377 | 1,281 | 5,359 | 4,906 | |||||||||||
Total revenue | 2,158 | 2,011 | 8,604 | 8,032 | |||||||||||
Total revenue-FTE 1 | 2,192 | 2,046 | 8,742 | 8,174 | |||||||||||
Net income per average common share: | |||||||||||||||
Diluted | 0.90 | 0.91 | 3.60 | 3.58 | |||||||||||
Basic | 0.91 | 0.92 | 3.63 | 3.62 | |||||||||||
Cash dividends paid per common share | 0.26 | 0.24 | 1.00 | 0.92 | |||||||||||
Average common shares outstanding: | |||||||||||||||
Diluted | 497,055 | 514,507 | 503,466 | 520,586 | |||||||||||
Basic | 491,497 | 508,536 | 498,638 | 514,844 | |||||||||||
December 31 | |||||||
(Dollars in millions and shares in thousands, except per share data) (Unaudited) | 2016 | 2015 | |||||
ASSETS | |||||||
Cash and due from banks | $5,091 | $4,299 | |||||
Federal funds sold and securities borrowed or purchased under agreements to resell | 1,307 | 1,277 | |||||
Interest-bearing deposits in other banks | 25 | 23 | |||||
Trading assets and derivative instruments | 6,067 | 6,119 | |||||
Securities available for sale | 30,672 | 27,825 | |||||
Loans held for sale ("LHFS") | 4,169 | 1,838 | |||||
Loans held for investment: | |||||||
Commercial and industrial ("C&I") | 69,213 | 67,062 | |||||
Commercial real estate ("CRE") | 4,996 | 6,236 | |||||
Commercial construction | 4,015 | 1,954 | |||||
Residential mortgages - guaranteed | 537 | 629 | |||||
Residential mortgages - nonguaranteed | 26,137 | 24,744 | |||||
Residential home equity products | 11,912 | 13,171 | |||||
Residential construction | 404 | 384 | |||||
Consumer student - guaranteed | 6,167 | 4,922 | |||||
Consumer other direct | 7,771 | 6,127 | |||||
Consumer indirect | 10,736 | 10,127 | |||||
Consumer credit cards | 1,410 | 1,086 | |||||
Total loans held for investment | 143,298 | 136,442 | |||||
Allowance for loan and lease losses ("ALLL") | (1,709 | ) | (1,752 | ) | |||
Net loans held for investment | 141,589 | 134,690 | |||||
Goodwill | 6,337 | 6,337 | |||||
MSRs | 1,572 | 1,307 | |||||
Other assets | 8,046 | 7,102 | |||||
Total assets 1 | $204,875 | $190,817 | |||||
LIABILITIES | |||||||
Deposits: | |||||||
Noninterest-bearing consumer and commercial deposits | $43,431 | $42,272 | |||||
Interest-bearing consumer and commercial deposits: | |||||||
NOW accounts | 45,534 | 38,990 | |||||
Money market accounts | 54,166 | 51,783 | |||||
Savings | 6,266 | 6,057 | |||||
Consumer time | 5,534 | 6,108 | |||||
Other time | 3,933 | 3,711 | |||||
Total consumer and commercial deposits | 158,864 | 148,921 | |||||
Brokered time deposits | 924 | 899 | |||||
Foreign deposits | 610 | 10 | |||||
Total deposits | 160,398 | 149,830 | |||||
Funds purchased | 2,116 | 1,949 | |||||
Securities sold under agreements to repurchase | 1,633 | 1,654 | |||||
Other short-term borrowings | 1,015 | 1,024 | |||||
Long-term debt | 11,748 | 8,462 | |||||
Trading liabilities and derivative instruments | 1,351 | 1,263 | |||||
Other liabilities | 2,996 | 3,198 | |||||
Total liabilities | 181,257 | 167,380 | |||||
SHAREHOLDERS' EQUITY | |||||||
Preferred stock, no par value | 1,225 | 1,225 | |||||
Common stock, $1.00 par value | 550 | 550 | |||||
Additional paid-in capital | 9,010 | 9,094 | |||||
Retained earnings | 16,000 | 14,686 | |||||
Treasury stock, at cost, and other | (2,346 | ) | (1,658 | ) | |||
Accumulated other comprehensive loss, net of tax | (821 | ) | (460 | ) | |||
Total shareholders' equity | 23,618 | 23,437 | |||||
Total liabilities and shareholders' equity | $204,875 | $190,817 | |||||
Common shares outstanding | 491,188 | 508,712 | |||||
Common shares authorized | 750,000 | 750,000 | |||||
Preferred shares outstanding | 12 | 12 | |||||
Preferred shares authorized | 50,000 | 50,000 | |||||
Treasury shares of common stock | 58,738 | 41,209 |
SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
December 31, 2016 | September 30, 2016 | ||||||||||||||||||||
(Dollars in millions) (Unaudited) | Average Balances | Interest Income/ Expense | Yields/ Rates | Average Balances | Interest Income/ Expense | Yields/ Rates | |||||||||||||||
ASSETS | |||||||||||||||||||||
Loans held for investment: 1 | |||||||||||||||||||||
Commercial and industrial ("C&I") | $68,407 | $549 | 3.19 | % | $68,242 | $536 | 3.13 | % | |||||||||||||
Commercial real estate ("CRE") | 5,141 | 38 | 2.93 | 5,975 | 44 | 2.92 | |||||||||||||||
Commercial construction | 3,852 | 31 | 3.22 | 2,909 | 24 | 3.28 | |||||||||||||||
Residential mortgages - guaranteed | 542 | 4 | 2.57 | 540 | 5 | 3.34 | |||||||||||||||
Residential mortgages - nonguaranteed | 26,065 | 244 | 3.75 | 26,022 | 243 | 3.74 | |||||||||||||||
Residential home equity products | 11,809 | 116 | 3.91 | 12,075 | 119 | 3.93 | |||||||||||||||
Residential construction | 382 | 4 | 4.24 | 379 | 4 | 4.47 | |||||||||||||||
Consumer student - guaranteed | 5,990 | 62 | 4.12 | 5,705 | 58 | 4.03 | |||||||||||||||
Consumer other direct | 7,556 | 88 | 4.64 | 7,090 | 81 | 4.56 | |||||||||||||||
Consumer indirect | 10,633 | 92 | 3.44 | 11,161 | 96 | 3.41 | |||||||||||||||
Consumer credit cards | 1,324 | 33 | 9.93 | 1,224 | 31 | 10.12 | |||||||||||||||
Nonaccrual | 877 | 8 | 3.77 | 935 | 4 | 1.70 | |||||||||||||||
Total loans held for investment | 142,578 | 1,269 | 3.54 | 142,257 | 1,245 | 3.48 | |||||||||||||||
Securities available for sale: | |||||||||||||||||||||
Taxable | 29,314 | 166 | 2.27 | 28,460 | 157 | 2.21 | |||||||||||||||
Tax-exempt | 273 | 2 | 3.08 | 181 | 2 | 3.41 | |||||||||||||||
Total securities available for sale | 29,587 | 168 | 2.28 | 28,641 | 159 | 2.22 | |||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell | 1,332 | — | (0.03 | ) | 1,171 | — | 0.11 | ||||||||||||||
Loans held for sale ("LHFS") | 3,570 | 30 | 3.42 | 2,867 | 25 | 3.47 | |||||||||||||||
Interest-bearing deposits in other banks | 24 | — | 0.47 | 24 | — | 0.38 | |||||||||||||||
Interest earning trading assets | 5,384 | 25 | 1.83 | 5,563 | 22 | 1.57 | |||||||||||||||
Total earning assets | 182,475 | 1,492 | 3.25 | 180,523 | 1,451 | 3.20 | |||||||||||||||
Allowance for loan and lease losses ("ALLL") | (1,724 | ) | (1,756 | ) | |||||||||||||||||
Cash and due from banks | 5,405 | 5,442 | |||||||||||||||||||
Other assets | 15,375 | 14,822 | |||||||||||||||||||
Noninterest earning trading assets and derivative instruments | 1,103 | 1,538 | |||||||||||||||||||
Unrealized gains on securities available for sale, net | 512 | 907 | |||||||||||||||||||
Total assets | $203,146 | $201,476 | |||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
NOW accounts | $42,929 | $17 | 0.16 | % | $41,160 | $15 | 0.14 | % | |||||||||||||
Money market accounts | 54,416 | 30 | 0.22 | 54,500 | 29 | 0.21 | |||||||||||||||
Savings | 6,259 | — | 0.03 | 6,304 | — | 0.03 | |||||||||||||||
Consumer time | 5,599 | 10 | 0.69 | 5,726 | 10 | 0.69 | |||||||||||||||
Other time | 3,954 | 10 | 0.97 | 3,981 | 10 | 0.97 | |||||||||||||||
Total interest-bearing consumer and commercial deposits | 113,157 | 67 | 0.23 | 111,671 | 64 | 0.23 | |||||||||||||||
Brokered time deposits | 935 | 3 | 1.28 | 959 | 3 | 1.31 | |||||||||||||||
Foreign deposits | 308 | — | 0.45 | 130 | — | 0.37 | |||||||||||||||
Total interest-bearing deposits | 114,400 | 70 | 0.24 | 112,760 | 67 | 0.24 | |||||||||||||||
Funds purchased | 1,008 | 1 | 0.43 | 784 | 1 | 0.36 | |||||||||||||||
Securities sold under agreements to repurchase | 1,708 | 2 | 0.45 | 1,691 | 2 | 0.45 | |||||||||||||||
Interest-bearing trading liabilities | 1,146 | 6 | 2.13 | 930 | 5 | 2.11 | |||||||||||||||
Other short-term borrowings | 978 | — | 0.11 | 1,266 | — | 0.19 | |||||||||||||||
Long-term debt | 11,632 | 70 | 2.37 | 12,257 | 68 | 2.21 | |||||||||||||||
Total interest-bearing liabilities | 130,872 | 149 | 0.45 | 129,688 | 143 | 0.44 | |||||||||||||||
Noninterest-bearing deposits | 44,839 | 43,642 | |||||||||||||||||||
Other liabilities | 3,112 | 3,356 | |||||||||||||||||||
Noninterest-bearing trading liabilities and derivative instruments | 279 | 380 | |||||||||||||||||||
Shareholders’ equity | 24,044 | 24,410 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $203,146 | $201,476 | |||||||||||||||||||
Interest Rate Spread | 2.80 | % | 2.76 | % | |||||||||||||||||
Net Interest Income | $1,343 | $1,308 | |||||||||||||||||||
Net Interest Income-FTE 2 | $1,377 | $1,342 | |||||||||||||||||||
Net Interest Margin 3 | 2.93 | % | 2.88 | % | |||||||||||||||||
Net Interest Margin-FTE 2, 3 | 3.00 | 2.96 |
SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID, continued | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
(Dollars in millions) (Unaudited) | Average Balances | Interest Income/ Expense | Yields/ Rates | Average Balances | Interest Income/ Expense | Yields/ Rates | |||||||||||||||
ASSETS | |||||||||||||||||||||
Loans held for investment: 1 | |||||||||||||||||||||
C&I | $68,406 | $2,148 | 3.14 | % | $65,786 | $1,974 | 3.00 | % | |||||||||||||
CRE | 5,808 | 169 | 2.92 | 6,178 | 173 | 2.80 | |||||||||||||||
Commercial construction | 2,898 | 94 | 3.25 | 1,603 | 50 | 3.12 | |||||||||||||||
Residential mortgages - guaranteed | 575 | 20 | 3.45 | 636 | 24 | 3.77 | |||||||||||||||
Residential mortgages - nonguaranteed | 25,554 | 964 | 3.77 | 23,759 | 913 | 3.84 | |||||||||||||||
Residential home equity products | 12,297 | 484 | 3.94 | 13,535 | 501 | 3.70 | |||||||||||||||
Residential construction | 377 | 17 | 4.39 | 384 | 19 | 4.85 | |||||||||||||||
Consumer student - guaranteed | 5,551 | 224 | 4.03 | 4,584 | 173 | 3.78 | |||||||||||||||
Consumer other direct | 6,871 | 313 | 4.56 | 5,344 | 230 | 4.30 | |||||||||||||||
Consumer indirect | 10,712 | 365 | 3.40 | 10,262 | 333 | 3.24 | |||||||||||||||
Consumer credit cards | 1,188 | 120 | 10.10 | 944 | 94 | 10.00 | |||||||||||||||
Nonaccrual | 881 | 21 | 2.43 | 543 | 22 | 4.13 | |||||||||||||||
Total loans held for investment | 141,118 | 4,939 | 3.50 | 133,558 | 4,506 | 3.37 | |||||||||||||||
Securities available for sale: | |||||||||||||||||||||
Taxable | 28,216 | 645 | 2.29 | 26,327 | 587 | 2.23 | |||||||||||||||
Tax-exempt | 189 | 6 | 3.37 | 176 | 6 | 3.70 | |||||||||||||||
Total securities available for sale | 28,405 | 651 | 2.29 | 26,503 | 593 | 2.24 | |||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell | 1,241 | 1 | 0.10 | 1,147 | — | — | |||||||||||||||
LHFS | 2,570 | 92 | 3.60 | 2,348 | 82 | 3.47 | |||||||||||||||
Interest-bearing deposits in other banks | 24 | — | 0.40 | 22 | — | 0.12 | |||||||||||||||
Interest earning trading assets | 5,467 | 95 | 1.73 | 5,235 | 84 | 1.62 | |||||||||||||||
Total earning assets | 178,825 | 5,778 | 3.23 | 168,813 | 5,265 | 3.12 | |||||||||||||||
ALLL | (1,746 | ) | (1,835 | ) | |||||||||||||||||
Cash and due from banks | 4,999 | 5,614 | |||||||||||||||||||
Other assets | 14,880 | 14,527 | |||||||||||||||||||
Noninterest earning trading assets and derivative instruments | 1,388 | 1,265 | |||||||||||||||||||
Unrealized gains on securities available for sale, net | 658 | 508 | |||||||||||||||||||
Total assets | $199,004 | $188,892 | |||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
NOW accounts | $40,949 | $55 | 0.13 | % | $35,161 | $31 | 0.09 | % | |||||||||||||
Money market accounts | 53,795 | 107 | 0.20 | 50,518 | 85 | 0.17 | |||||||||||||||
Savings | 6,285 | 2 | 0.03 | 6,165 | 2 | 0.03 | |||||||||||||||
Consumer time | 5,852 | 43 | 0.73 | 6,443 | 49 | 0.77 | |||||||||||||||
Other time | 3,908 | 39 | 1.00 | 3,813 | 39 | 1.02 | |||||||||||||||
Total interest-bearing consumer and commercial deposits | 110,789 | 246 | 0.22 | 102,100 | 206 | 0.20 | |||||||||||||||
Brokered time deposits | 926 | 12 | 1.33 | 888 | 13 | 1.41 | |||||||||||||||
Foreign deposits | 123 | 1 | 0.42 | 218 | — | 0.13 | |||||||||||||||
Total interest-bearing deposits | 111,838 | 259 | 0.23 | 103,206 | 219 | 0.21 | |||||||||||||||
Funds purchased | 1,055 | 4 | 0.37 | 822 | 1 | 0.11 | |||||||||||||||
Securities sold under agreements to repurchase | 1,734 | 7 | 0.42 | 1,821 | 4 | 0.21 | |||||||||||||||
Interest-bearing trading liabilities | 1,025 | 24 | 2.29 | 881 | 22 | 2.44 | |||||||||||||||
Other short-term borrowings | 1,452 | 3 | 0.23 | 2,135 | 3 | 0.16 | |||||||||||||||
Long-term debt | 10,767 | 260 | 2.42 | 10,873 | 252 | 2.32 | |||||||||||||||
Total interest-bearing liabilities | 127,871 | 557 | 0.44 | 119,738 | 501 | 0.42 | |||||||||||||||
Noninterest-bearing deposits | 43,400 | 42,102 | |||||||||||||||||||
Other liabilities | 3,252 | 3,276 | |||||||||||||||||||
Noninterest-bearing trading liabilities and derivative instruments | 413 | 430 | |||||||||||||||||||
Shareholders’ equity | 24,068 | 23,346 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $199,004 | $188,892 | |||||||||||||||||||
Interest Rate Spread | 2.79 | % | 2.70 | % | |||||||||||||||||
Net Interest Income | $5,221 | $4,764 | |||||||||||||||||||
Net Interest Income-FTE 2 | $5,359 | $4,906 | |||||||||||||||||||
Net Interest Margin 3 | 2.92 | % | 2.82 | % | |||||||||||||||||
Net Interest Margin-FTE 2, 3 | 3.00 | 2.91 | |||||||||||||||||||
SunTrust Banks, Inc. and Subsidiaries OTHER FINANCIAL DATA | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31 | December 31 | ||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
CREDIT DATA | |||||||||||||||
Allowance for credit losses, beginning of period | $1,811 | $1,847 | $1,815 | $1,991 | |||||||||||
(Benefit)/provision for unfunded commitments | (1 | ) | 2 | 4 | 9 | ||||||||||
Provision/(benefit) for loan losses: | |||||||||||||||
Commercial | 36 | 59 | 329 | 133 | |||||||||||
Residential | 13 | (37 | ) | (59 | ) | (67 | ) | ||||||||
Consumer | 53 | 27 | 170 | 90 | |||||||||||
Total provision for loan losses | 102 | 49 | 440 | 156 | |||||||||||
Charge-offs: | |||||||||||||||
Commercial | (78 | ) | (35 | ) | (287 | ) | (117 | ) | |||||||
Residential | (34 | ) | (41 | ) | (136 | ) | (218 | ) | |||||||
Consumer | (51 | ) | (38 | ) | (168 | ) | (135 | ) | |||||||
Total charge-offs | (163 | ) | (114 | ) | (591 | ) | (470 | ) | |||||||
Recoveries: | |||||||||||||||
Commercial | 9 | 10 | 35 | 45 | |||||||||||
Residential | 8 | 11 | 30 | 42 | |||||||||||
Consumer | 10 | 10 | 43 | 42 | |||||||||||
Total recoveries | 27 | 31 | 108 | 129 | |||||||||||
Net charge-offs | (136 | ) | (83 | ) | (483 | ) | (341 | ) | |||||||
Allowance for credit losses, end of period | $1,776 | $1,815 | $1,776 | $1,815 | |||||||||||
Components: | |||||||||||||||
Allowance for loan and lease losses ("ALLL") | $1,709 | $1,752 | |||||||||||||
Unfunded commitments reserve | 67 | 63 | |||||||||||||
Allowance for credit losses | $1,776 | $1,815 | |||||||||||||
Net charge-offs to average loans held for investment (annualized): | |||||||||||||||
Commercial | 0.35 | % | 0.13 | % | 0.32 | % | 0.10 | % | |||||||
Residential | 0.26 | 0.30 | 0.27 | 0.45 | |||||||||||
Consumer | 0.64 | 0.51 | 0.51 | 0.44 | |||||||||||
Total net charge-offs to total average loans held for investment | 0.38 | 0.24 | 0.34 | 0.26 | |||||||||||
Period Ended | |||||||||||||||
Nonaccrual/nonperforming loans ("NPLs"): | |||||||||||||||
Commercial | $414 | $319 | |||||||||||||
Residential | 424 | 344 | |||||||||||||
Consumer | 7 | 9 | |||||||||||||
Total nonaccrual/NPLs | 845 | 672 | |||||||||||||
Other real estate owned (“OREO”) | 60 | 56 | |||||||||||||
Other repossessed assets | 14 | 7 | |||||||||||||
Total nonperforming assets ("NPAs") | $919 | $735 | |||||||||||||
Accruing restructured loans | $2,535 | $2,603 | |||||||||||||
Nonaccruing restructured loans | 306 | 176 | |||||||||||||
Accruing loans held for investment past due > 90 days (guaranteed) | 1,254 | 939 | |||||||||||||
Accruing loans held for investment past due > 90 days (non-guaranteed) | 34 | 42 | |||||||||||||
Accruing LHFS past due > 90 days | 1 | — | |||||||||||||
NPLs to total loans held for investment | 0.59 | % | 0.49 | % | |||||||||||
NPAs to total loans held for investment plus OREO and other repossessed assets | 0.64 | 0.54 | |||||||||||||
ALLL to period-end loans held for investment 1, 2 | 1.19 | 1.29 | |||||||||||||
ALLL to NPLs 1, 2 | 2.03x | 2.62x | |||||||||||||
ALLL to annualized net charge-offs 1 | 3.17x | 5.33x | 3.54x | 5.14x | |||||||||||
SunTrust Banks, Inc. and Subsidiaries OTHER FINANCIAL DATA, continued | |||||||||||||||||||||||
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||||||||||
(Dollars in millions) (Unaudited) | MSRs - Fair Value | Other | Total | MSRs - Fair Value | Other | Total | |||||||||||||||||
OTHER INTANGIBLE ASSETS ROLLFORWARD | |||||||||||||||||||||||
Balance, beginning of period | $1,262 | $20 | $1,282 | $1,206 | $13 | $1,219 | |||||||||||||||||
Amortization | — | (2 | ) | (2 | ) | — | (8 | ) | (8 | ) | |||||||||||||
Servicing rights originated | 54 | — | 54 | 238 | 13 | 251 | |||||||||||||||||
Servicing rights purchased | — | — | — | 109 | — | 109 | |||||||||||||||||
Fair value changes due to inputs and assumptions 1 | 41 | — | 41 | (32 | ) | — | (32 | ) | |||||||||||||||
Other changes in fair value 2 | (49 | ) | — | (49 | ) | (210 | ) | — | (210 | ) | |||||||||||||
Servicing rights sold | (1 | ) | — | (1 | ) | (4 | ) | — | (4 | ) | |||||||||||||
Balance, December 31, 2015 | $1,307 | $18 | $1,325 | $1,307 | $18 | $1,325 | |||||||||||||||||
Balance, beginning of period | $1,119 | $12 | $1,131 | $1,307 | $18 | $1,325 | |||||||||||||||||
Amortization | — | (3 | ) | (3 | ) | — | (9 | ) | (9 | ) | |||||||||||||
Servicing rights originated | 114 | — | 114 | 312 | — | 312 | |||||||||||||||||
Servicing rights purchased | 96 | — | 96 | 200 | — | 200 | |||||||||||||||||
Servicing rights acquired in Pillar acquisition | — | 62 | 62 | — | 62 | 62 | |||||||||||||||||
Other intangible assets acquired in Pillar acquisition | — | 14 | 14 | — | 14 | 14 | |||||||||||||||||
Fair value changes due to inputs and assumptions 1 | 315 | — | 315 | (13 | ) | — | (13 | ) | |||||||||||||||
Other changes in fair value 2 | (72 | ) | — | (72 | ) | (232 | ) | — | (232 | ) | |||||||||||||
Servicing rights sold | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Balance, December 31, 2016 | $1,572 | $85 | $1,657 | $1,572 | $85 | $1,657 |
SunTrust Banks, Inc. and Subsidiaries APPENDIX A - RECONCILEMENT OF NON-U.S. GAAP MEASURES 1 | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31 | September 30 | December 31 | December 31 | ||||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net interest income | $1,343 | $1,308 | $1,246 | $5,221 | $4,764 | ||||||||||||||
Fully taxable-equivalent ("FTE") adjustment | 34 | 34 | 35 | 138 | 142 | ||||||||||||||
Net interest income-FTE 2 | 1,377 | 1,342 | 1,281 | 5,359 | 4,906 | ||||||||||||||
Noninterest income | 815 | 889 | 765 | 3,383 | 3,268 | ||||||||||||||
Total revenue-FTE 2 | $2,192 | $2,231 | $2,046 | $8,742 | $8,174 | ||||||||||||||
Return on average common shareholders’ equity 3 | 7.85 | % | 7.89 | % | 8.32 | % | 7.97 | % | 8.46 | % | |||||||||
Impact of removing average intangible assets and related amortization, other than MSRs and other servicing rights | 2.91 | 2.84 | 3.17 | 2.94 | 3.29 | ||||||||||||||
Return on average tangible common shareholders' equity 4 | 10.76 | % | 10.73 | % | 11.49 | % | 10.91 | % | 11.75 | % | |||||||||
Net interest margin | 2.93 | % | 2.88 | % | 2.90 | % | 2.92 | % | 2.82 | % | |||||||||
Impact of FTE adjustment | 0.07 | 0.08 | 0.08 | 0.08 | 0.09 | ||||||||||||||
Net interest margin-FTE 2 | 3.00 | % | 2.96 | % | 2.98 | % | 3.00 | % | 2.91 | % | |||||||||
Noninterest expense | $1,397 | $1,409 | $1,288 | $5,468 | $5,160 | ||||||||||||||
Total revenue | 2,158 | 2,197 | 2,011 | 8,604 | 8,032 | ||||||||||||||
Efficiency ratio 5 | 64.74 | % | 64.13 | % | 64.05 | % | 63.55 | % | 64.24 | % | |||||||||
Impact of FTE adjustment | (1.01 | ) | (0.99 | ) | (1.09 | ) | (1.00 | ) | (1.11 | ) | |||||||||
Efficiency ratio-FTE 2, 5 | 63.73 | 63.14 | 62.96 | 62.55 | 63.13 | ||||||||||||||
Impact of excluding amortization related to intangible assets and certain tax credits | (0.65 | ) | (0.60 | ) | (0.85 | ) | (0.56 | ) | (0.49 | ) | |||||||||
Tangible efficiency ratio-FTE 2, 6 | 63.08 | % | 62.54 | % | 62.11 | % | 61.99 | % | 62.64 | % | |||||||||
Basel III Common Equity Tier 1 ("CET1") ratio (transitional) 7 | 9.59 | % | 9.78 | % | 9.96 | % | |||||||||||||
Impact of MSRs and other under fully phased-in approach | (0.16 | ) | (0.12 | ) | (0.16 | ) | |||||||||||||
Basel III fully phased-in CET1 ratio 7 | 9.43 | % | 9.66 | % | 9.80 | % | |||||||||||||
SunTrust Banks, Inc. and Subsidiaries APPENDIX A - RECONCILEMENT OF NON-U.S. GAAP MEASURES, continued 1 | |||||||
December 31 | December 31 | ||||||
(Dollars in millions, except per share data) (Unaudited) | 2016 | 2015 | |||||
Total shareholders' equity | $23,618 | $23,437 | |||||
Goodwill, net of deferred taxes of $251 million and $240 million, respectively | (6,086 | ) | (6,097 | ) | |||
Other intangible assets (including MSRs and other servicing rights), net of deferred taxes of $1 million and $3 million, respectively | (1,656 | ) | (1,322 | ) | |||
MSRs and other servicing rights | 1,638 | 1,316 | |||||
Tangible equity 2 | 17,514 | 17,334 | |||||
Noncontrolling interest | (103 | ) | (108 | ) | |||
Preferred stock | (1,225 | ) | (1,225 | ) | |||
Tangible common equity 2 | $16,186 | $16,001 | |||||
Total assets | $204,875 | $190,817 | |||||
Goodwill | (6,337 | ) | (6,337 | ) | |||
Other intangible assets (including MSRs and other servicing rights) | (1,657 | ) | (1,325 | ) | |||
MSRs and other servicing rights | 1,638 | 1,316 | |||||
Tangible assets | $198,519 | $184,471 | |||||
Tangible equity to tangible assets 2 | 8.82 | % | 9.40 | % | |||
Tangible common equity to tangible assets 2 | 8.15 | 8.67 | |||||
Tangible book value per common share 3 | $32.95 | $31.45 | |||||
SunTrust Banks, Inc. and Subsidiaries CONSUMER BANKING AND PRIVATE WEALTH MANAGEMENT | |||||||||||||||
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Statements of Income: | |||||||||||||||
Net interest income | $734 | $701 | $2,857 | $2,728 | |||||||||||
FTE adjustment | — | — | — | 1 | |||||||||||
Net interest income-FTE 1 | 734 | 701 | 2,857 | 2,729 | |||||||||||
Provision for credit losses 2 | 78 | 36 | 185 | 137 | |||||||||||
Net interest income-FTE - after provision for credit losses 1 | 656 | 665 | 2,672 | 2,592 | |||||||||||
Noninterest income before net securities gains | 364 | 372 | 1,472 | 1,507 | |||||||||||
Net securities gains | — | — | — | — | |||||||||||
Total noninterest income | 364 | 372 | 1,472 | 1,507 | |||||||||||
Noninterest expense before amortization | 763 | 742 | 3,054 | 2,934 | |||||||||||
Amortization | 1 | 1 | 2 | 5 | |||||||||||
Total noninterest expense | 764 | 743 | 3,056 | 2,939 | |||||||||||
Income-FTE - before provision for income taxes 1 | 256 | 294 | 1,088 | 1,160 | |||||||||||
Provision for income taxes | 94 | 108 | 404 | 430 | |||||||||||
FTE adjustment | — | — | — | 1 | |||||||||||
Net income including income attributable to noncontrolling interest | 162 | 186 | 684 | 729 | |||||||||||
Less: net income attributable to noncontrolling interest | — | — | — | — | |||||||||||
Net income | $162 | $186 | $684 | $729 | |||||||||||
Total revenue | $1,098 | $1,073 | $4,329 | $4,235 | |||||||||||
Total revenue-FTE 1 | 1,098 | 1,073 | 4,329 | 4,236 | |||||||||||
Selected Average Balances: | |||||||||||||||
Total loans | $43,379 | $40,834 | $42,723 | $40,614 | |||||||||||
Goodwill | 4,262 | 4,262 | 4,262 | 4,262 | |||||||||||
Other intangible assets excluding MSRs | 11 | 18 | 13 | 16 | |||||||||||
Total assets | 49,079 | 46,515 | 48,415 | 46,513 | |||||||||||
Consumer and commercial deposits | 97,340 | 91,643 | 95,875 | 91,104 | |||||||||||
Performance Ratios: | |||||||||||||||
Efficiency ratio | 69.49 | % | 69.24 | % | 70.59 | % | 69.40 | % | |||||||
Impact of FTE adjustment | — | — | — | — | |||||||||||
Efficiency ratio-FTE 1 | 69.49 | 69.24 | 70.59 | 69.40 | |||||||||||
Impact of excluding amortization and associated funding cost of intangible assets | (1.41 | ) | (1.53 | ) | (1.46 | ) | (1.58 | ) | |||||||
Tangible efficiency ratio-FTE 1, 3 | 68.08 | % | 67.71 | % | 69.13 | % | 67.82 | % | |||||||
Other Information (End of Period) 4 : | |||||||||||||||
Trust and institutional managed assets | $40,370 | $42,205 | |||||||||||||
Retail brokerage managed assets | 12,872 | 10,545 | |||||||||||||
Total managed assets | 53,242 | 52,750 | |||||||||||||
Non-managed assets | 91,980 | 91,046 | |||||||||||||
Total assets under advisement | $145,222 | $143,796 | |||||||||||||
1 | Net interest income-FTE, income-FTE, total revenue-FTE, efficiency ratio-FTE, and tangible efficiency ratio-FTE 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 an FTE basis plus noninterest income. |
2 | Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances. |
3 | A tangible efficiency ratio is presented, which excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (the level of which may vary from company to company), it allows investors to more easily compare this segment's efficiency to other business segments and companies in the industry. This measure is utilized by management to assess the efficiency of the Company and its lines of business. |
4 | Beginning in the first quarter of 2016, the Company implemented a new policy for the classification and disclosure of assets under advisement. The primary change was related to the reclassification of brokerage assets into managed and non-managed assets. Prior period amounts were restated for comparative purposes. |
SunTrust Banks, Inc. and Subsidiaries WHOLESALE BANKING | |||||||||||||||
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Statements of Income: | |||||||||||||||
Net interest income | $487 | $453 | $1,849 | $1,781 | |||||||||||
FTE adjustment | 33 | 34 | 136 | 138 | |||||||||||
Net interest income-FTE 1 | 520 | 487 | 1,985 | 1,919 | |||||||||||
Provision for credit losses 2 | 19 | 64 | 272 | 137 | |||||||||||
Net interest income-FTE - after provision for credit losses 1 | 501 | 423 | 1,713 | 1,782 | |||||||||||
Noninterest income before net securities gains | 327 | 265 | 1,234 | 1,180 | |||||||||||
Net securities gains | — | — | — | — | |||||||||||
Total noninterest income | 327 | 265 | 1,234 | 1,180 | |||||||||||
Noninterest expense before amortization | 425 | 368 | 1,646 | 1,516 | |||||||||||
Amortization | 14 | 17 | 47 | 35 | |||||||||||
Total noninterest expense | 439 | 385 | 1,693 | 1,551 | |||||||||||
Income-FTE - before provision for income taxes 1 | 389 | 303 | 1,254 | 1,411 | |||||||||||
Provision for income taxes | 90 | 54 | 251 | 321 | |||||||||||
FTE adjustment | 33 | 34 | 136 | 138 | |||||||||||
Net income including income attributable to noncontrolling interest | 266 | 215 | 867 | 952 | |||||||||||
Less: net income attributable to noncontrolling interest | — | — | — | — | |||||||||||
Net income | $266 | $215 | $867 | $952 | |||||||||||
Total revenue | $814 | $718 | $3,083 | $2,961 | |||||||||||
Total revenue-FTE 1 | 847 | 752 | 3,219 | 3,099 | |||||||||||
Selected Average Balances: | |||||||||||||||
Total loans | $71,924 | $68,785 | $71,605 | $67,872 | |||||||||||
Goodwill | 2,075 | 2,075 | 2,075 | 2,075 | |||||||||||
Other intangible assets excluding MSRs | 15 | 1 | 5 | — | |||||||||||
Total assets | 85,848 | 81,454 | 85,513 | 80,915 | |||||||||||
Consumer and commercial deposits | 57,445 | 54,059 | 55,293 | 50,379 | |||||||||||
Performance Ratios: | |||||||||||||||
Efficiency ratio | 53.93 | % | 53.62 | % | 54.91 | % | 52.38 | % | |||||||
Impact of FTE adjustment | (1.99 | ) | (2.42 | ) | (2.28 | ) | (2.36 | ) | |||||||
Efficiency ratio-FTE 1 | 51.94 | 51.20 | 52.63 | 50.02 | |||||||||||
Impact of excluding amortization and associated funding cost of intangible assets | (2.25 | ) | (2.92 | ) | (2.13 | ) | (1.82 | ) | |||||||
Tangible efficiency ratio-FTE 1, 3 | 49.69 | % | 48.28 | % | 50.50 | % | 48.20 | % | |||||||
1 | Net interest income-FTE, income-FTE, total revenue-FTE, efficiency ratio-FTE, and tangible efficiency ratio-FTE 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 an FTE basis plus noninterest income. |
2 | Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances. |
3 | A tangible efficiency ratio is presented, which excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (the level of which may vary from company to company), it allows investors to more easily compare this segment's efficiency to other business segments and companies in the industry. This measure is utilized by management to assess the efficiency of the Company and its lines of business. |
SunTrust Banks, Inc. and Subsidiaries MORTGAGE BANKING | |||||||||||||||
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Statements of Income: | |||||||||||||||
Net interest income | $113 | $116 | $448 | $483 | |||||||||||
FTE adjustment | — | — | — | — | |||||||||||
Net interest income-FTE 1 | 113 | 116 | 448 | 483 | |||||||||||
Provision/(benefit) for credit losses 2 | 4 | (49 | ) | (13 | ) | (110 | ) | ||||||||
Net interest income-FTE - after provision/(benefit) for credit losses 1 | 109 | 165 | 461 | 593 | |||||||||||
Noninterest income before net securities gains | 102 | 114 | 559 | 460 | |||||||||||
Net securities gains | — | — | — | — | |||||||||||
Total noninterest income | 102 | 114 | 559 | 460 | |||||||||||
Noninterest expense before amortization | 185 | 171 | 732 | 681 | |||||||||||
Amortization | — | — | — | — | |||||||||||
Total noninterest expense | 185 | 171 | 732 | 681 | |||||||||||
Income-FTE - before provision for income taxes 1 | 26 | 108 | 288 | 372 | |||||||||||
Provision for income taxes | 6 | 40 | 105 | 85 | |||||||||||
FTE adjustment | — | — | — | — | |||||||||||
Net income including income attributable to noncontrolling interest | 20 | 68 | 183 | 287 | |||||||||||
Less: net income attributable to noncontrolling interest | — | — | — | — | |||||||||||
Net income | $20 | $68 | $183 | $287 | |||||||||||
Total revenue | $215 | $230 | $1,007 | $943 | |||||||||||
Total revenue-FTE 1 | 215 | 230 | 1,007 | 943 | |||||||||||
Selected Average Balances: | |||||||||||||||
Total loans | $27,211 | $25,549 | $26,726 | $25,024 | |||||||||||
Goodwill | — | — | — | — | |||||||||||
Other intangible assets excluding MSRs | — | — | — | — | |||||||||||
Total assets | 32,245 | 28,979 | 30,697 | 28,692 | |||||||||||
Consumer and commercial deposits | 3,186 | 2,457 | 2,969 | 2,679 | |||||||||||
Performance Ratios: | |||||||||||||||
Efficiency ratio | 85.98 | % | 74.40 | % | 72.71 | % | 72.20 | % | |||||||
Impact of FTE adjustment | — | — | — | — | |||||||||||
Efficiency ratio-FTE 1 | 85.98 | 74.40 | 72.71 | 72.20 | |||||||||||
Impact of excluding amortization and associated funding cost of intangible assets | — | — | — | — | |||||||||||
Tangible efficiency ratio-FTE 1, 3 | 85.98 | % | 74.40 | % | 72.71 | % | 72.20 | % | |||||||
Production Data: | |||||||||||||||
Channel mix | |||||||||||||||
Retail | $3,368 | $2,324 | $12,409 | $10,414 | |||||||||||
Correspondent | 5,297 | 2,632 | 16,950 | 12,318 | |||||||||||
Total production | $8,665 | $4,956 | $29,359 | $22,732 | |||||||||||
Channel mix - percent | |||||||||||||||
Retail | 39 | % | 47 | % | 42 | % | 46 | % | |||||||
Correspondent | 61 | 53 | 58 | 54 | |||||||||||
Total production | 100 | % | 100 | % | 100 | % | 100 | % | |||||||
Purchase and refinance mix | |||||||||||||||
Refinance | $4,985 | $2,364 | $15,147 | $10,827 | |||||||||||
Purchase | 3,680 | 2,592 | 14,212 | 11,905 | |||||||||||
Total production | $8,665 | $4,956 | $29,359 | $22,732 | |||||||||||
Purchase and refinance mix - percent | |||||||||||||||
Refinance | 58 | % | 48 | % | 52 | % | 48 | % | |||||||
Purchase | 42 | 52 | 48 | 52 | |||||||||||
Total production | 100 | % | 100 | % | 100 | % | 100 | % | |||||||
Applications | $8,264 | $6,704 | $40,559 | $33,006 | |||||||||||
Mortgage Servicing Data (End of Period): | |||||||||||||||
Total loans serviced | $160,175 | $148,232 | |||||||||||||
Total loans serviced for others | 129,626 | 120,963 | |||||||||||||
Net carrying value of MSRs | 1,572 | 1,307 | |||||||||||||
Ratio of net carrying value of MSRs to total loans serviced for others | 1.213 | % | 1.080 | % |
SunTrust Banks, Inc. and Subsidiaries CORPORATE OTHER | |||||||||||||||
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
(Dollars in millions) (Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Statements of Income: | |||||||||||||||
Net interest income/(expense) 1 | $9 | ($24 | ) | $67 | ($228 | ) | |||||||||
FTE adjustment | 1 | 1 | 2 | 3 | |||||||||||
Net interest income/(expense)-FTE 2 | 10 | (23 | ) | 69 | (225 | ) | |||||||||
Provision for credit losses 3 | — | — | — | 1 | |||||||||||
Net interest income/(expense)-FTE - after provision for credit losses 2 | 10 | (23 | ) | 69 | (226 | ) | |||||||||
Noninterest income before net securities gains | 22 | 14 | 114 | 100 | |||||||||||
Net securities gains | — | — | 4 | 21 | |||||||||||
Total noninterest income | 22 | 14 | 118 | 121 | |||||||||||
Noninterest expense before amortization | 10 | (10 | ) | (13 | ) | (11 | ) | ||||||||
Amortization | (1 | ) | (1 | ) | — | — | |||||||||
Total noninterest expense | 9 | (11 | ) | (13 | ) | (11 | ) | ||||||||
Income/(loss)-FTE - before provision/(benefit) for income taxes 2 | 23 | 2 | 200 | (94 | ) | ||||||||||
Provision/(benefit) for income taxes | 3 | (17 | ) | 45 | (72 | ) | |||||||||
FTE adjustment | 1 | 1 | 2 | 3 | |||||||||||
Net income/(loss) including income attributable to noncontrolling interest | 19 | 18 | 153 | (25 | ) | ||||||||||
Less: net income attributable to noncontrolling interest | 2 | 3 | 9 | 10 | |||||||||||
Net income/(loss) | $17 | $15 | $144 | ($35 | ) | ||||||||||
Total revenue | $31 | ($10 | ) | $185 | ($107 | ) | |||||||||
Total revenue-FTE 2 | 32 | (9 | ) | 187 | (104 | ) | |||||||||
Selected Average Balances: | |||||||||||||||
Total loans | $64 | $46 | $64 | $48 | |||||||||||
Securities available for sale | 29,549 | 26,942 | 28,365 | 26,456 | |||||||||||
Goodwill | — | — | — | — | |||||||||||
Other intangible assets excluding MSRs | — | — | — | 1 | |||||||||||
Total assets | 35,974 | 32,708 | 34,379 | 32,772 | |||||||||||
Consumer and commercial deposits | 25 | 4 | 52 | 40 | |||||||||||
Other Information (End of Period): | |||||||||||||||
Duration of investment portfolio (in years) | 4.6 | 4.5 | |||||||||||||
Net interest income interest rate sensitivity: | |||||||||||||||
% Change in net interest income under: | |||||||||||||||
Instantaneous 200 basis point increase in rates over next 12 months | 3.3 | % | 5.7 | % | |||||||||||
Instantaneous 100 basis point increase in rates over next 12 months | 1.9 | % | 3.0 | % | |||||||||||
Instantaneous 25 basis point decrease in rates over next 12 months | (0.6 | )% | (1.2 | )% | |||||||||||
1 | Net interest income/(expense) is driven by matched funds transfer pricing applied for segment reporting and actual net interest income. |
2 | Net interest income-FTE, income-FTE, and total revenue-FTE 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 an FTE basis plus noninterest income. |
3 | Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitments reserve balances. |