EX-99.1 2 a93018earningsrelease-exhi.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
suntrustlogo3q2018.jpg
News Release
Contact:
 
 
 
Investors
 
Media
 
Ankur Vyas
 
Mike McCoy
 
(404) 827-6714
 
(404) 588-7230
 
For Immediate Release
October 19, 2018

SunTrust Reports Third Quarter 2018 Results
Continued Efficiency Improvements, Strong Credit Quality, Higher Capital Return,
and Favorable Operating Environment Drive 47% Year-over-Year EPS Growth

ATLANTA -- SunTrust Banks, Inc. (NYSE: STI) reported net income available to common shareholders of $726 million, or $1.56 per average common diluted share. These results include $0.14 per share of discrete tax benefits driven by the finalization of the impact of tax reform on the Company and the consolidation of SunTrust Mortgage into SunTrust Bank, which was completed in the third quarter.

Diluted earnings per share increased 5% sequentially and 47% year-over-year. For the nine months ended September 30, 2018, earnings per share was $4.34, up 45% year-over-year.

“Our performance this quarter provides further validation of our successful execution against the Company’s key strategies. Our focus on efficiency continues to drive good results, with the year-to-date tangible efficiency ratio improving by 150 basis points. Additionally, our commitment to investing in growth to meet more client needs is driving good loan growth which helped offset lower noninterest income,” said William H. Rogers, Jr., chairman and CEO of SunTrust Banks, Inc. “We have revenue momentum going into the fourth quarter of the year, and 2018 is on track to be the seventh consecutive year of growth in earnings per share, improved efficiency, and higher capital returns.”

1



Third Quarter 2018 Financial Highlights
(Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income, net interest margin, total revenue, and efficiency ratios are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal federal tax rate for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018, as well as state income taxes, where applicable. We provide unadjusted amounts in the table on page 3 of this news release and detailed reconciliations and additional information in Appendix A on pages 22 and 23.)

Income Statement
Net income available to common shareholders was $726 million, or $1.56 per average common diluted share, compared to $1.49 for the prior quarter and $1.06 for the third quarter of 2017.
The current quarter included $0.14 per average common share of discrete tax benefits.
Total revenue was down 1% sequentially and stable year-over-year. The sequential decrease was driven by lower noninterest income, which was partially offset by higher net interest income as a result of growth in earning assets.
Net interest margin was 3.27% in the current quarter, down 1 basis point sequentially and up 12 basis points compared to the prior year. The sequential decline was driven by higher funding costs (largely driven by increased wholesale funding), which offset the benefits of higher benchmark interest rates. The year-over-year increase was driven primarily by higher benchmark interest rates in addition to positive mix shift in the loans held for investment ("LHFI") portfolio, offset partially by higher funding costs.
Provision for credit losses increased $29 million sequentially and decreased $59 million year-over-year. The sequential increase was driven primarily by a lesser decline in the allowance for loan and lease losses ("ALLL") and higher net charge-offs on commercial loans, while the year-over-year decrease was driven by elevated hurricane-related reserves in the third quarter of 2017.
Noninterest expense decreased slightly both sequentially and year-over-year. The decreases were driven primarily by lower employee compensation and benefits and other noninterest expense, partially offset by higher outside processing and software costs.
The efficiency and tangible efficiency ratios for the current quarter were 59.8% and 58.9%, respectively, which is relatively stable compared to the prior quarter and prior year.

Balance Sheet
Average performing LHFI was up 1% compared to the prior quarter, driven by growth in C&I, CRE, residential mortgages, and consumer direct loans.
Average consumer and commercial deposits remained relatively stable compared to both the prior quarter and prior year.

Capital
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 September 30, 2018, slightly lower than the prior quarter due to loan growth and increased share repurchases.
During the quarter, the Company repurchased $500 million of its outstanding common stock which is 25% of the $2.0 billion authorization it received per its 2018 Capital Plan. The Company also increased its quarterly common stock dividend by 25%, from $0.40 per common share in the prior quarter to $0.50 per share.
Book value per common share was $48.00 and tangible book value per common share was $34.51, both up slightly from June 30, 2018, driven primarily by growth in retained earnings, offset in part by an increase in accumulated other comprehensive loss.

Asset Quality
Nonperforming loans ("NPLs") decreased $60 million from the prior quarter and represented 0.47% of period-end LHFI at September 30, 2018. The decrease was driven primarily by the return to accrual status of certain commercial credits as well as charge-offs of certain commercial loans.
Net charge-offs for the current quarter were $88 million, or 0.24% of total average LHFI on an annualized basis, compared to 0.20% during the prior quarter and 0.21% during the third quarter of 2017.

2



At September 30, 2018, the ALLL to period-end LHFI ratio was 1.10%, a 4 basis point decline compared to the prior quarter, driven by continued improvements in asset quality.
Provision for credit losses increased $29 million sequentially and decreased $59 million year-over-year. The sequential increase was driven primarily by a lesser decline in the ALLL and higher net charge-offs on commercial loans, while the year-over-year decrease was driven by elevated hurricane-related reserves in the third quarter of 2017 and continued asset quality improvements resulting in a lower ALLL ratio.

 
 
 
 
 
 
 
 
 
 
Income Statement (Dollars in millions, except per share data)
3Q 2018
 
2Q 2018
 
1Q 2018
 
4Q 2017
 
3Q 2017
Net interest income
$1,512
 
$1,488
 
$1,441
 
$1,434
 
$1,430
Net interest income-FTE 1
1,534
 
1,510
 
1,461
 
1,472
 
1,467
Net interest margin
3.22
%
 
3.23
%
 
3.20
%
 
3.09
%
 
3.07
%
Net interest margin-FTE 1
3.27

 
3.28

 
3.24

 
3.17

 
3.15

Noninterest income
$782
 
$829
 
$796
 
$833
 
$846
Total revenue
2,294

 
2,317

 
2,237

 
2,267

 
2,276

Total revenue-FTE 1
2,316

 
2,339

 
2,257

 
2,305

 
2,313

Noninterest expense
1,384

 
1,390

 
1,417

 
1,520

 
1,391

Provision for credit losses
61

 
32

 
28

 
79

 
120

Net income available to common shareholders
726

 
697

 
612

 
710

 
512

Earnings per average common diluted share
1.56

 
1.49

 
1.29

 
1.48

 
1.06

 
 
 
 
 
 
 
 
 
 
Balance Sheet (Dollars in billions)
 
 
 
 
 
 
 
 
 
Average LHFI

$146.0

 

$144.2

 

$142.9

 

$144.0

 

$144.7

Average consumer and commercial deposits
159.3

 
159.0

 
159.2

 
160.7

 
159.4

 
 
 
 
 
 
 
 
 
 
Capital
 
 
 
 
 
 
 
 
 
Basel III capital ratios at period end 2 :
 
 
 
 
 
 
 
 
 
Tier 1 capital
10.72
%
 
10.86
%
 
11.00
%
 
11.15
%
 
10.74
%
Common Equity Tier 1 ("CET1")
9.60

 
9.72

 
9.84

 
9.74

 
9.62

Total average shareholders’ equity to total average assets
11.71

 
11.78

 
12.05

 
12.09

 
11.94

 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
Net charge-offs to total average LHFI (annualized)
0.24
%
 
0.20
%
 
0.22
%
 
0.29
%
 
0.21
%
ALLL to period-end LHFI 3
1.10

 
1.14

 
1.19

 
1.21

 
1.23

NPLs to period-end LHFI
0.47

 
0.52

 
0.50

 
0.47

 
0.48

1 See Appendix A on pages 22 and 23 for non-U.S. GAAP reconciliations and additional information.
2 Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at September 30, 2018 are estimated as of the date of this document.
3 LHFI measured at fair value were excluded from period-end LHFI in the calculation as no allowance is recorded for loans measured at fair value.

Consolidated Financial Performance Details
(Commentary is on a fully taxable-equivalent basis unless otherwise noted)
Revenue
Total revenue was $2.3 billion for the current quarter, a decrease of $23 million compared to the prior quarter, driven by lower noninterest income. Noninterest income decreased $47 million sequentially due largely to lower capital markets-related income, other noninterest income, and client transaction-related fees, offset partially by higher commercial real estate related income and wealth management-related income. The decrease in noninterest income was offset partially by a $24 million increase in net interest income during the current quarter. Compared to the third quarter of 2017, total revenue was stable.

3



Net Interest Income
Net interest income was $1.5 billion for the current quarter, an increase of $24 million compared to the prior quarter due primarily to a $1.8 billion increase in average earning assets and one more day in the current quarter, offset partially by a 1 basis point decline in the net interest margin. The $67 million increase relative to the prior year was driven largely by a 12 basis point expansion in the net interest margin and a $1.5 billion increase in average earning assets.
Net interest margin for the current quarter was 3.27%, compared to 3.28% in the prior quarter and 3.15% in the third quarter of 2017. The sequential decline was driven by higher funding costs (driven primarily by increased wholesale funding), which offset the benefits of higher benchmark interest rates. The 12 basis point increase relative to the prior year was driven primarily by higher benchmark interest rates in addition to positive mix shift in the loan portfolio, offset partially by higher funding costs.
For the nine months ended September 30, 2018, net interest income was $4.5 billion, a $199 million increase compared to the nine months ended September 30, 2017. The net interest margin was 3.26% for the first nine months of 2018, a 13 basis point increase compared to the same period in 2017.
Noninterest Income
Noninterest income was $782 million for the current quarter, compared to $829 million for the prior quarter and $846 million for the third quarter of 2017. The $47 million sequential decrease was due primarily to lower capital markets-related income, other noninterest income, and client transaction-related fees, which was partially offset by higher commercial real estate related income and wealth management-related income. Compared to the third quarter of 2017, noninterest income decreased $64 million driven primarily by lower capital markets-related income, mortgage-related income, and client transaction-related fees.
Client transaction-related fees (namely service charges on deposits, other charges and fees, and card fees) decreased $12 million sequentially due primarily to a change in our process for recognizing card rewards expenses, which resulted in four months of rewards expenses being recognized in the third quarter of 2018 (recorded as a contra-revenue). The $21 million year-over-year decrease was due primarily to the same factors that impacted the sequential quarter as well as the impact of adopting the revenue recognition accounting standard during the first quarter of 2018, which resulted in the netting of certain expense items against card fees, other charges and fees, and service charges on deposit accounts.
Investment banking income was $150 million for the current quarter, compared to $169 million in the prior quarter and prior year. The $19 million sequential and year-over-year decreases were due primarily to lower loan syndication and investment grade bond origination activity, offset partially by strong deal flow activity in equity offerings during the third quarter of 2018. Beginning in the third quarter of 2018, the Company began presenting bridge commitment fee income related to capital market transactions in ‘investment banking income’. For periods prior to July 1, 2018, this income was presented in ‘other charges and fees’ and has been reclassified to 'investment banking income' for comparability. Capital markets bridge commitment fee income was $12 million and $21 million for the nine months ended September 30, 2018 and 2017, respectively.
Trading income was $42 million for the current quarter, compared to $53 million in the prior quarter and $51 million in the third quarter of 2017. The $11 million sequential decrease was due primarily to lower transaction activity with respect to client-related interest rate hedging activity. The $9 million year-over-year decrease was due primarily to lower trading revenues within fixed income sales and trading.
Mortgage servicing income was $43 million for the current quarter, relatively stable compared to $40 million in the prior quarter and $46 million in the third quarter of 2017. At September 30, 2018, the servicing portfolio totaled $170.5 billion, relatively stable compared to the prior quarter and a 3% increase compared to the prior year due to MSRs purchased in the first quarter of 2018 which transferred in the second quarter of 2018.

4



Mortgage production income for the current quarter was $40 million, compared to $43 million for the prior quarter and $61 million for the third quarter of 2017. The $21 million year-over-year decrease was due largely to lower gain on sale margins. Mortgage application volume decreased 9% sequentially and 1% compared to the third quarter of 2017. Closed loan volume decreased 2% sequentially and remained stable year-over-year.
Trust and investment management income was $80 million for the current quarter, compared to $75 million in the prior quarter and $79 million for the third quarter of 2017. The $5 million sequential increase was due primarily to seasonally higher trust fees in the current quarter.
Retail investment services income was $74 million for the current quarter, compared to $73 million in the prior quarter and $69 million in the third quarter of 2017. The $5 million year-over-year increase was due primarily to higher assets under management.
Commercial real estate related income was $24 million for the current quarter, compared to $18 million for the prior quarter and $17 million for the third quarter of 2017. The increase compared to the prior quarter and prior year was driven primarily by higher transaction volume with the Company’s agency lending business and higher tax-credit-related income within the Company’s affordable housing business.
Other noninterest income was $21 million for the current quarter, compared to $38 million in the prior quarter and $25 million in the third quarter of 2017. The sequential decrease was driven primarily by a $12 million remeasurement gain on a fintech equity investment recognized in the second quarter of 2018.
For the nine months ended September 30, 2018, noninterest income was $2.4 billion, compared to $2.5 billion for the nine months ended September 30, 2017. The $112 million decrease was driven by lower mortgage-related income, capital markets-related income, and client transaction-related fees.
Noninterest Expense
Noninterest expense was $1.4 billion in the current quarter, down $6 million sequentially and $7 million compared to the third quarter of 2017. The sequential decrease was driven largely by lower employee compensation and benefits, other noninterest expense, net occupancy expense, and equipment expense, offset partially by higher outside processing and software costs and marketing and customer development costs. The year-over-year decrease was due to declines across most expense categories, offset partially by higher outside processing and software costs.
Employee compensation and benefits expense was $795 million in the current quarter, compared to $802 million in the prior quarter and $806 million in the third quarter of 2017. The $7 million sequential and $11 million year-over-year decreases were primarily due to lower benefit-related costs (medical and FICA) in addition to lower compensation costs in the current quarter, offset partially by higher contract programming costs.
Outside processing and software expense was $234 million in the current quarter, compared to $227 million in the prior quarter and $203 million in the third quarter of 2017. The $7 million sequential and $31 million year-over-year increases were driven primarily by higher software-related costs related to the amortization of new and upgraded technology assets.
Net occupancy expense was $86 million in the current quarter, compared to $90 million in the prior quarter and $94 million in the prior year quarter. The $8 million year-over-year decrease was driven by lease termination gains which favorably impacted the second and third quarter of 2018 (with the majority of the benefit occurring in the third quarter of 2018).
Marketing and customer development expense was $45 million in the current quarter, compared to $40 million in the prior quarter and $45 million in the third quarter of 2017. The $5 million sequential increase was driven by normal seasonality in advertising and client development costs.

5



Regulatory assessments expense was $39 million in the current quarter, stable relative to the prior quarter and down $8 million compared to the third quarter of 2017. The year-over-year decrease was driven by a reduced FDIC assessment rate resulting primarily from our improved earnings profile and higher levels of unsecured debt.
Operating losses/(gains) were $18 million in the current quarter, compared to $17 million in the prior quarter and ($34) million in the third quarter of 2017. The $52 million year-over-year increase was due primarily to the favorable resolution of several legal matters during the third quarter of 2017 which resulted in $58 million of net discrete benefits.
Other noninterest expense was $108 million in the current quarter, compared to $114 million in the prior quarter and $168 million in the third quarter of 2017. The $6 million sequential decrease was driven primarily by lower severance and communications costs, offset partially by higher legal and consulting expenses. The $60 million year-over-year decrease was driven primarily by $44 million of discrete charges associated with efficiency initiatives (severance and software writedowns) recognized in the third quarter of 2017.
Noninterest expense for the nine months ended September 30, 2018 was down 1% compared to the nine months ended September 30, 2017. The $52 million decrease was driven largely by ongoing efficiency initiatives, offset partially by higher outside processing and software expense.
Income Taxes
For the current quarter, the Company recorded a provision for income taxes of $95 million compared to $171 million for the prior quarter and $225 million for the third quarter of 2017. The effective tax rate for the current quarter was 11%, compared to 19% in the prior quarter and 29% in the third quarter of 2017. The sequential decrease in the effective tax rate was due primarily to $67 million of discrete tax benefits recognized in the current quarter related to the finalization of the impact of tax reform on the Company and the completion of the merger of SunTrust Mortgage into SunTrust Bank. The year-over-year decrease in the effective tax rate was driven by the reduction in the U.S. federal corporate income tax rate from 35% to 21% in addition to the aforementioned tax benefits recognized in the current quarter.

Balance Sheet
At September 30, 2018, the Company had total assets of $211.3 billion and total shareholders’ equity of $24.1 billion, representing 11% of total assets. Book value per common share was $48.00 and tangible book value per common share was $34.51, both up slightly compared to June 30, 2018, driven primarily by growth in retained earnings, offset partially by an increase in accumulated other comprehensive loss.
Loans
Average performing LHFI totaled $145.2 billion for the current quarter, up 1% compared to the prior quarter and prior year driven primarily by increases in CRE, residential mortgages, and consumer direct loans. The sequential increase was also driven by growth in the C&I portfolio. Compared to the prior year, average C&I balances declined by $645 million, driven by the sale of Premium Assignment Corporation on December 1, 2017, which included $1.3 billion of C&I loan balances.
Deposits
Average consumer and commercial deposits for the current quarter were $159.3 billion, relatively stable compared to the prior quarter and the third quarter of 2017. Sequentially, growth in time deposits was offset by declines in demand deposits and savings accounts. Year-over-year, increases in time deposits, NOW, and savings account balances were offset by declines in money market accounts and demand deposits.

6



Capital and Liquidity
The Company’s estimated capital ratios were well above current regulatory requirements with the Common Equity Tier 1 ratio estimated to be 9.6% at September 30, 2018. The ratios of average total equity to average total assets and tangible common equity to tangible assets were 11.7% and 7.7%, respectively, at September 30, 2018. The Company continues to have substantial available liquidity in the form of cash, high-quality government-backed or government-sponsored securities, and other available contingency funding sources.
The Company declared a common stock dividend of $0.50 per common share and repurchased $500 million of its outstanding common stock in the third quarter of 2018 which is 25% of the $2.0 billion authorization it received per its 2018 Capital Plan. Additionally, the Bank issued $500 million of 4-year and $500 million of 6-year fixed-to-floating rate senior notes as well as $300 million of 4-year floating rate senior notes in the third quarter of 2018.
Asset Quality
Overall asset quality performance continues to be strong. Nonperforming assets ("NPAs") totaled $754 million at September 30, 2018, down $60 million from the prior quarter and $38 million year-over-year. The ratio of NPLs to period-end LHFI was 0.47%, 0.52%, and 0.48% at September 30, 2018, June 30, 2018, and September 30, 2017, respectively. The decrease was driven primarily by the return to accrual status of certain commercial credits as well as charge-offs of certain commercial loans. In addition, residential mortgage nonperforming loans declined due to loans transitioning from non-accruing (as a result of forbearance relief received after hurricanes) back to accruing status. 
Net charge-offs totaled $88 million during the current quarter, an increase of $15 million compared to the prior quarter and $10 million compared to the third quarter of 2017, driven by increased charge-offs on commercial loans. The ratio of annualized net charge-offs to total average LHFI was 0.24% during the current quarter, compared to 0.20% during the prior quarter and 0.21% during the third quarter of 2017.
The provision for credit losses was $61 million in the current quarter, a sequential increase of $29 million and a year-over-year decrease of $59 million. The sequential increase was driven primarily by a lesser decline in the ALLL and higher net charge-offs on commercial loans, while the year-over-year decrease was driven by elevated hurricane-related reserves in the third quarter of 2017 and continued asset quality improvements resulting in a lower ALLL ratio.
At September 30, 2018, the ALLL was $1.6 billion, which represented 1.10% of period-end loans, a 4 basis point decline relative to June 30, 2018, driven by continued improvements in asset quality.
Early stage delinquencies increased 2 basis points from the prior quarter and 3 basis points from September 30, 2017 to 0.74% at September 30, 2018. Excluding government-guaranteed loans which accounted for 0.50% at September 30, 2018, early stage delinquencies were 0.24%, up 2 basis points compared to the prior quarter and down 5 basis points compared to the third quarter of 2017.

7



OTHER INFORMATION

About SunTrust Banks, Inc.
SunTrust Banks, Inc. (NYSE: STI) is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses, and communities it serves. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Headquartered in Atlanta, the Company has two business segments: Consumer and Wholesale. Its flagship subsidiary, SunTrust Bank, operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate, and institutional clients nationally. As of September 30, 2018, SunTrust had total assets of $211 billion and total deposits of $160 billion. The Company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. Learn more at suntrust.com.
Business Segment Results
The Company has included its business segment financial tables as part of this release. Revenue and income amounts labeled "FTE" in the business segment tables are reported on a fully taxable-equivalent basis. For the business segments, net interest income is computed using matched-maturity funds transfer pricing and noninterest income includes federal and state tax credits that are grossed-up on a pre-tax equivalent basis. Further, provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision/(benefit) attributable to each segment's quarterly change in the allowance for loan and lease losses ("ALLL") and unfunded commitments reserve balances. SunTrust also reports results for Corporate Other, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Total Corporate Other results presented in this document also include Reconciling Items, which are comprised of differences created between internal management accounting practices and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and certain matched-maturity funds transfer pricing credits and charges. A detailed discussion of the business segment results will be included in the Company’s forthcoming 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 Form 10-Q. Detailed financial tables and other information are also available at investors.suntrust.com. This information is also included in a current report on Form 8-K furnished with the SEC today.
Conference Call
SunTrust management will host a conference call on October 19, 2018, at 8:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals may call in beginning at 7:15 a.m. (Eastern Time) by dialing 1-877-209-9920 (Passcode: SunTrust). Individuals calling from outside the United States should dial 1-612-332-1210 (Passcode: SunTrust). A replay of the call will be available approximately one hour after the call ends on October 19, 2018, and will remain available until November 19, 2018, by dialing 1-800-475-6701 (domestic) or 1-320-365-3844 (international) (Passcode: 454908). Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at investors.suntrust.com. Beginning the afternoon of October 19, 2018, individuals may access an archived version of the webcast in the “Events & Presentations” section of the SunTrust investor relations website. This webcast will be archived and available for one year.
Non-GAAP Financial Measures
This news release includes non-GAAP financial measures to describe SunTrust’s performance. Additional information and reconciliations of those measures to GAAP measures are provided in the appendix to this news release beginning at page 22.
In this news release, consistent with SEC Industry Guide 3, the Company presents total revenue, net interest income, net interest margin, and efficiency ratios on a fully taxable equivalent (“FTE”) basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 21% for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018, as well as state income taxes, where applicable, to increase tax-exempt interest income to a taxable-equivalent basis. 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-FTE plus noninterest income.

8



The Company presents the following additional non-GAAP measures because many investors find them useful. Specifically:
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 capital adequacy and profitability of the Company.
Similarly, the Company presents Efficiency ratio-FTE, Tangible efficiency ratio-FTE, and Adjusted 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. 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. Adjusted tangible efficiency ratio-FTE removes the pre-tax impact of Form 8-K items announced on December 4, 2017 and the impacts of tax reform-related items from the calculation of Tangible efficiency ratio-FTE. The Company believes this measure is useful to investors because it is more reflective of normalized operations as it reflects results that are primarily client relationship and client transaction driven. These measures are utilized by management to assess the efficiency of the Company and its lines of business.
Important Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements. Statements regarding future growth in earnings per share, improved efficiency, and higher capital returns 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,” “forecast,” “goals,” “targets,” “initiatives,” “opportunity,” “focus,” “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. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements 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. Future dividends, and the amount of any such dividend, must be declared by our board of directors in their discretion. Also, future share repurchases and the timing of any such repurchases are subject to market conditions and management's discretion. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and in other periodic reports that we file with the SEC.

9



SunTrust Banks, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in millions and shares in thousands, except per share data) (Unaudited) 
Three Months Ended September 30
 
%
 
Nine Months Ended September 30
 
%
2018

2017
 
 Change
 
2018

2017
 
 Change
EARNINGS & DIVIDENDS
 

 
 
 
 
 

 
 
 
Net income

$752

 

$538

 
40
 %
 

$2,117

 

$1,533

 
38
 %
Net income available to common shareholders
726

 
512

 
42

 
2,036

 
1,468

 
39

Total revenue
2,294

 
2,276

 
1

 
6,848

 
6,719

 
2

Total revenue-FTE 1
2,316

 
2,313

 

 
6,913

 
6,826

 
1

Net income per average common share:
 
 
 
 
 
 
 
 
 
 
 
Diluted

$1.56



$1.06

 
47
 %
 

$4.34



$3.00

 
45
 %
Basic
1.58


1.07

 
48

 
4.38


3.04

 
44

Dividends paid per common share
0.50


0.40

 
25

 
1.30


0.92

 
41

CONDENSED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
 
 
Total assets

$207,395



$205,738

 
1
 %
 

$205,370



$204,833

 
 %
Earning assets
186,344


184,861

 
1

 
184,607


184,180

 

Loans held for investment ("LHFI")
145,995


144,706

 
1

 
144,368


144,276

 

Intangible assets including residential mortgage servicing rights ("MSRs")
8,396


8,009

 
5

 
8,332


8,019

 
4

Residential MSRs
1,987


1,589

 
25

 
1,922


1,599

 
20

Consumer and commercial deposits
159,348


159,419

 

 
159,159


159,145

 

Total shareholders’ equity
24,275


24,573

 
(1
)
 
24,324


24,131

 
1

Preferred stock
2,025


1,975

 
3

 
2,145


1,643

 
31

Period End Balances:
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 

$211,276



$208,252

 
1
 %
Earning assets
 
 
 
 
 
 
188,141


185,071

 
2

LHFI
 
 
 
 
 
 
147,215


144,264

 
2

Allowance for loan and lease losses ("ALLL")
 
 
 
 
 
 
1,623


1,772

 
(8
)
Consumer and commercial deposits
 
 
 
 
 
 
159,332


161,778

 
(2
)
Total shareholders’ equity
 
 
 
 
 
 
24,139


24,522

 
(2
)
FINANCIAL RATIOS & OTHER DATA
 
 
 
 
 
 
 
 
 
 
 
Return on average total assets
1.44
%

1.04
%
 
38
 %
 
1.38
%

1.00
%
 
38
 %
Return on average common shareholders’ equity
13.01


9.03

 
44

 
12.33


8.77

 
41

Return on average tangible common shareholders' equity 1
18.06


12.45

 
45

 
17.14


12.09

 
42

Net interest margin
3.22


3.07

 
5

 
3.22


3.05

 
6

Net interest margin-FTE 1
3.27

 
3.15

 
4

 
3.26

 
3.13

 
4

Efficiency ratio
60.34

 
61.12

 
(1
)
 
61.20

 
63.16

 
(3
)
Efficiency ratio-FTE 1
59.76


60.14

 
(1
)
 
60.62


62.17

 
(2
)
Tangible efficiency ratio-FTE 1
58.94


59.21

 

 
59.89


61.44

 
(3
)
Effective tax rate 
11


29

 
(62
)
 
16


28

 
(43
)
Basel III capital ratios at period end 2:
 
 
 
 
 
 
 
 
 
 
 
Common Equity Tier 1 ("CET1")
 
 
 
 
 
 
9.60
%
 
9.62
%
 
 %
Tier 1 capital
 
 
 
 
 
 
10.72

 
10.74

 

Total capital
 
 
 
 
 
 
12.47

 
12.69

 
(2
)
Leverage
 
 
 
 
 
 
9.66

 
9.50

 
2

Total average shareholders’ equity to total average assets
11.71
%

11.94
%
 
(2
)%
 
11.84


11.78

 
1

Tangible equity to tangible assets 1
 
 
 
 
 
 
8.76


9.12

 
(4
)
Tangible common equity to tangible assets 1
 
 
 
 
 
 
7.72

 
8.10

 
(5
)
Book value per common share
 
 
 
 
 
 

$48.00



$47.16

 
2

Tangible book value per common share 1
 
 
 
 
 
 
34.51


34.34

 

Market capitalization
 
 
 
 
 
 
30,632


28,451

 
8

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Diluted
464,164


483,640

 
(4
)
 
469,006


489,176

 
(4
)
Basic
460,252


478,258

 
(4
)
 
464,804


483,711

 
(4
)
Full-time equivalent employees
 
 
 
 
 
 
22,839


24,215

 
(6
)
Number of ATMs
 
 
 
 
 
 
2,053


2,108

 
(3
)
Full service banking offices
 
 
 
 
 
 
1,217


1,275

 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
1 
See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures.
2 
Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at September 30, 2018 are estimated as of the date of this release.

10



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER FINANCIAL HIGHLIGHTS
 
Three Months Ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
2018
 
2018
 
2018
 
2017
 
2017
EARNINGS & DIVIDENDS
 
 
 
 
 
 
 
 
 
Net income

$752

 

$722

 

$643

 

$740

 

$538

Net income available to common shareholders
726

 
697

 
612

 
710

 
512

Total revenue
2,294

 
2,317

 
2,237

 
2,267

 
2,276

Total revenue-FTE 1
2,316

 
2,339

 
2,257

 
2,305

 
2,313

Net income per average common share:
 
 
 
 
 
 
 
 
 
Diluted

$1.56

 

$1.49

 

$1.29

 

$1.48

 

$1.06

Basic
1.58

 
1.50

 
1.31

 
1.50

 
1.07

Dividends paid per common share
0.50

 
0.40

 
0.40

 
0.40

 
0.40

CONDENSED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
Total assets

$207,395

 

$204,548

 

$204,132

 

$205,219

 

$205,738

Earning assets
186,344

 
184,566

 
182,874

 
184,306

 
184,861

LHFI
145,995

 
144,156

 
142,920

 
144,039

 
144,706

Intangible assets including residential MSRs
8,396

 
8,355

 
8,244

 
8,077

 
8,009

Residential MSRs
1,987

 
1,944

 
1,833

 
1,662

 
1,589

Consumer and commercial deposits
159,348

 
158,957

 
159,169

 
160,745

 
159,419

Total shareholders’ equity
24,275

 
24,095

 
24,605

 
24,806

 
24,573

Preferred stock
2,025

 
2,025

 
2,390

 
2,236

 
1,975

Period End Balances:
 
 
 
 
 
 
 
 
 
Total assets

$211,276

 

$207,505

 

$204,885

 

$205,962

 

$208,252

Earning assets
188,141

 
185,304

 
182,913

 
182,710

 
185,071

LHFI
147,215

 
144,935

 
142,618

 
143,181

 
144,264

ALLL
1,623

 
1,650

 
1,694

 
1,735

 
1,772

Consumer and commercial deposits
159,332

 
160,410

 
161,357

 
159,795

 
161,778

Total shareholders’ equity
24,139

 
24,316

 
24,269

 
25,154

 
24,522

FINANCIAL RATIOS & OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average total assets
1.44
%
 
1.42
%
 
1.28
%
 
1.43
 %
 
1.04
%
Return on average common shareholders’ equity
13.01

 
12.73

 
11.23

 
12.54

 
9.03

Return on average tangible common shareholders' equity 1
18.06

 
17.74

 
15.60

 
17.24

 
12.45

Net interest margin
3.22

 
3.23

 
3.20

 
3.09

 
3.07

Net interest margin-FTE 1
3.27

 
3.28

 
3.24

 
3.17

 
3.15

Efficiency ratio
60.34

 
59.98

 
63.35

 
67.03

 
61.12

Efficiency ratio-FTE 1
59.76

 
59.41

 
62.77

 
65.94

 
60.14

Tangible efficiency ratio-FTE 1
58.94

 
58.69

 
62.11

 
64.84

 
59.21

Adjusted tangible efficiency ratio-FTE 1
58.94

 
58.69

 
62.11

 
59.85

 
59.21

Effective tax rate
11

 
19

 
19

 
(11
)
 
29

Basel III capital ratios at period end 2:
 
 
 
 
 
 
 
 
 
CET1
9.60
%
 
9.72
%
 
9.84
%
 
9.74
 %
 
9.62
%
Tier 1 capital
10.72

 
10.86

 
11.00

 
11.15

 
10.74

Total capital
12.47

 
12.67

 
12.90

 
13.09

 
12.69

Leverage
9.66

 
9.82

 
9.75

 
9.80

 
9.50

Total average shareholders’ equity to total average assets
11.71

 
11.78

 
12.05

 
12.09

 
11.94

Tangible equity to tangible assets 1
8.76

 
9.01

 
9.11

 
9.50

 
9.12

Tangible common equity to tangible assets 1
7.72

 
7.96

 
8.04

 
8.21

 
8.10

Book value per common share

$48.00

 

$47.70

 

$47.14

 

$47.94

 

$47.16

Tangible book value per common share 1
34.51

 
34.40

 
33.97

 
34.82

 
34.34

Market capitalization
30,632

 
30,712

 
31,959

 
30,417

 
28,451

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
Diluted
464,164

 
469,339

 
473,620

 
480,359

 
483,640

Basic
460,252

 
465,529

 
468,723

 
474,300

 
478,258

Full-time equivalent employees
22,839

 
23,199

 
23,208

 
23,785

 
24,215

Number of ATMs
2,053

 
2,062

 
2,075

 
2,116

 
2,108

Full service banking offices
1,217

 
1,222

 
1,236

 
1,268

 
1,275

 
 
 
 
 
 
 
 
 
 
1 
See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures.
2 
Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at September 30, 2018 are estimated as of the date of this release.


11



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended
 
Increase/(Decrease)
 
Nine Months Ended
 
Increase/(Decrease)
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
September 30
 
September 30
 
2018

2017
 
Amount
 
 % 3
 
2018

2017
 
Amount
 
 % 3
Interest income

$1,834



$1,635

 

$199

 
12
 %
 

$5,261



$4,747

 

$514

 
11
 %
Interest expense
322


205

 
117

 
57

 
821


548

 
273

 
50

NET INTEREST INCOME
1,512


1,430

 
82

 
6

 
4,440


4,199

 
241

 
6

Provision for credit losses
61


120

 
(59
)
 
(49
)
 
121


330

 
(209
)
 
(63
)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
1,451


1,310

 
141

 
11

 
4,319


3,869

 
450

 
12

NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
144

 
154

 
(10
)
 
(6
)
 
433


453

 
(20
)
 
(4
)
Other charges and fees 1
89

 
89

 

 

 
264


270

 
(6
)
 
(2
)
Card fees
75

 
86

 
(11
)
 
(13
)
 
241


255

 
(14
)
 
(5
)
Investment banking income 1
150

 
169

 
(19
)
 
(11
)
 
453


501

 
(48
)
 
(10
)
Trading income
42

 
51

 
(9
)
 
(18
)
 
137


148

 
(11
)
 
(7
)
Trust and investment management income
80

 
79

 
1

 
1

 
230

 
229

 
1

 

Retail investment services
74

 
69

 
5

 
7

 
219

 
208

 
11

 
5

Mortgage servicing related income
43

 
46

 
(3
)
 
(7
)
 
138

 
148

 
(10
)
 
(7
)
Mortgage production related income
40

 
61

 
(21
)
 
(34
)
 
118


170

 
(52
)
 
(31
)
Commercial real estate related income
24

 
17

 
7

 
41

 
66

 
61

 
5

 
8

Net securities gains

 

 

 

 
1


1

 

 

Other noninterest income
21

 
25

 
(4
)
 
(16
)
 
108


76

 
32

 
42

Total noninterest income
782


846

 
(64
)
 
(8
)
 
2,408


2,520

 
(112
)
 
(4
)
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 

 
 
 
 
 
Employee compensation and benefits
795

 
806

 
(11
)
 
(1
)
 
2,451


2,454

 
(3
)
 

Outside processing and software
234

 
203

 
31

 
15

 
667


612

 
55

 
9

Net occupancy expense
86

 
94

 
(8
)
 
(9
)
 
270


280

 
(10
)
 
(4
)
Marketing and customer development
45

 
45

 

 

 
127

 
129

 
(2
)
 
(2
)
Equipment expense
40

 
40

 

 

 
124

 
123

 
1

 
1

Regulatory assessments
39

 
47

 
(8
)
 
(17
)
 
118

 
143

 
(25
)
 
(17
)
Amortization
19

 
22

 
(3
)
 
(14
)
 
51

 
49

 
2

 
4

Operating losses/(gains)
18

 
(34
)
 
52

 
NM

 
40


17

 
23

 
NM

Other noninterest expense
108

 
168

 
(60
)
 
(36
)
 
343


436

 
(93
)
 
(21
)
Total noninterest expense
1,384


1,391

 
(7
)
 
(1
)
 
4,191


4,243

 
(52
)
 
(1
)
INCOME BEFORE PROVISION FOR INCOME TAXES
849


765

 
84

 
11

 
2,536


2,146

 
390

 
18

Provision for income taxes
95


225

 
(130
)
 
(58
)
 
412


606

 
(194
)
 
(32
)
NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
754


540

 
214

 
40

 
2,124


1,540

 
584

 
38

Less: Net income attributable to noncontrolling interest
2


2

 

 

 
7


7

 

 

NET INCOME

$752



$538

 

$214

 
40
 %
 

$2,117



$1,533

 

$584

 
38
 %
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$726



$512

 

$214

 
42
 %
 

$2,036



$1,468

 

$568

 
39
 %
Net interest income-FTE 2
1,534


1,467

 
67

 
5

 
4,505


4,306

 
199

 
5

Total revenue
2,294

 
2,276

 
18

 
1

 
6,848

 
6,719

 
129

 
2

Total revenue-FTE 2
2,316

 
2,313

 
3

 

 
6,913

 
6,826

 
87

 
1

Net income per average common share:
 
 
 
 

 

 
 
 
 
 
 
 
 
Diluted
1.56


1.06

 
0.50

 
47

 
4.34


3.00

 
1.34

 
45

Basic
1.58


1.07

 
0.51

 
48

 
4.38


3.04

 
1.34

 
44

Cash dividends paid per common share
0.50


0.40

 
0.10

 
25

 
1.30


0.92

 
0.38

 
41

Average common shares outstanding:
 
 
 
 

 

 
 
 
 
 
 
 
 
Diluted
464,164


483,640

 
(19,476
)
 
(4
)
 
469,006


489,176

 
(20,170
)
 
(4
)
Basic
460,252


478,258

 
(18,006
)
 
(4
)
 
464,804


483,711

 
(18,907
)
 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Beginning July 1, 2018, the Company began presenting bridge commitment fee income related to capital market transactions in Investment banking income on the Consolidated Statements of Income. For periods prior to July 1, 2018, this income was previously presented in Other charges and fees and has been reclassified to Investment banking income for comparability.
2 See Appendix A for additional information and reconcilements of non-U.S. GAAP measures to the related U.S.GAAP measures.
3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

12



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended
 
 
 
Three Months Ended
(Dollars in millions and shares in thousands, except per share data)
(Unaudited)
September 30
 
June 30
 
Increase/(Decrease)
 
March 31
 
December 31
 
September 30
2018
 
2018
 
Amount
 
 %
 
2018
 
2017
 
2017
Interest income

$1,834

 

$1,759

 

$75

 
4
 %
 

$1,668

 

$1,640

 

$1,635

Interest expense
322

 
271

 
51

 
19

 
227

 
206

 
205

NET INTEREST INCOME
1,512

 
1,488

 
24

 
2

 
1,441

 
1,434

 
1,430

Provision for credit losses
61

 
32

 
29

 
91

 
28

 
79

 
120

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
1,451

 
1,456

 
(5
)
 

 
1,413

 
1,355

 
1,310

NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
144

 
144

 

 

 
146

 
150

 
154

Other charges and fees 1
89

 
91

 
(2
)
 
(2
)
 
85

 
91

 
89

Card fees
75

 
85

 
(10
)
 
(12
)
 
81

 
88

 
86

Investment banking income 1
150

 
169

 
(19
)
 
(11
)
 
133

 
122

 
169

Trading income
42

 
53

 
(11
)
 
(21
)
 
42

 
41

 
51

Trust and investment management income
80

 
75

 
5

 
7

 
75

 
80

 
79

Retail investment services
74

 
73

 
1

 
1

 
72

 
70

 
69

Mortgage servicing related income
43

 
40

 
3

 
8

 
54

 
43

 
46

Mortgage production related income
40

 
43

 
(3
)
 
(7
)
 
36

 
61

 
61

Commercial real estate related income
24

 
18

 
6

 
33

 
23

 
62

 
17

Net securities gains/(losses)

 

 

 

 
1

 
(109
)
 

Other noninterest income
21

 
38

 
(17
)
 
(45
)
 
48

 
134

 
25

Total noninterest income
782

 
829

 
(47
)
 
(6
)
 
796

 
833

 
846

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee compensation and benefits
795

 
802

 
(7
)
 
(1
)
 
853

 
803

 
806

Outside processing and software
234

 
227

 
7

 
3

 
206

 
214

 
203

Net occupancy expense
86

 
90

 
(4
)
 
(4
)
 
94

 
97

 
94

Marketing and customer development
45

 
40

 
5

 
13

 
41

 
104

 
45

Equipment expense
40

 
44

 
(4
)
 
(9
)
 
40

 
41

 
40

Regulatory assessments
39

 
39

 

 

 
41

 
43

 
47

Amortization
19

 
17

 
2

 
12

 
15

 
25

 
22

Operating losses/(gains)
18

 
17

 
1

 
6

 
6

 
23

 
(34
)
Other noninterest expense
108

 
114

 
(6
)
 
(5
)
 
121

 
170

 
168

Total noninterest expense
1,384

 
1,390

 
(6
)
 

 
1,417

 
1,520

 
1,391

INCOME BEFORE PROVISION/(BENEFIT) FOR INCOME TAXES
849

 
895

 
(46
)
 
(5
)
 
792

 
668

 
765

Provision/(benefit) for income taxes
95

 
171

 
(76
)
 
(44
)
 
147

 
(74
)
 
225

NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
754

 
724

 
30

 
4

 
645

 
742

 
540

Less: Net income attributable to noncontrolling interest
2

 
2

 

 

 
2

 
2

 
2

NET INCOME

$752

 

$722

 

$30

 
4
 %
 

$643

 

$740

 

$538

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$726

 

$697

 

$29

 
4
 %
 

$612

 

$710

 

$512

Net interest income-FTE 2
1,534

 
1,510

 
24

 
2

 
1,461

 
1,472

 
1,467

Total revenue
2,294

 
2,317

 
(23
)
 
(1
)
 
2,237

 
2,267

 
2,276

Total revenue-FTE 2
2,316

 
2,339

 
(23
)
 
(1
)
 
2,257

 
2,305

 
2,313

Net income per average common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
1.56

 
1.49

 
0.07

 
5

 
1.29

 
1.48

 
1.06

Basic
1.58

 
1.50

 
0.08

 
5

 
1.31

 
1.50

 
1.07

Cash dividends paid per common share
0.50

 
0.40

 
0.10

 
25

 
0.40

 
0.40

 
0.40

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
464,164

 
469,339

 
(5,175
)
 
(1
)
 
473,620

 
480,359

 
483,640

Basic
460,252

 
465,529

 
(5,277
)
 
(1
)
 
468,723

 
474,300

 
478,258

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Beginning July 1, 2018, the Company began presenting bridge commitment fee income related to capital market transactions in Investment banking income on the Consolidated Statements of Income. For periods prior to July 1, 2018, this income was previously presented in Other charges and fees and has been reclassified to Investment banking income for comparability.
2 See Appendix A for additional information and reconcilements of non-U.S. GAAP measures to the related U.S.GAAP measures.


13



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
 
September 30
 
(Decrease)/Increase
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
2018
 
2017
 
Amount
 
 % 3
ASSETS
 
 
 
 
 
 
 
Cash and due from banks

$6,206

 

$7,071

 

($865
)
 
(12
)%
Federal funds sold and securities borrowed or purchased under agreements to resell
1,374

 
1,182

 
192

 
16

Interest-bearing deposits in other banks
25

 
25

 

 

Trading assets and derivative instruments
5,676

 
6,318

 
(642
)
 
(10
)
Securities available for sale 1
30,984

 
30,927

 
57

 

Loans held for sale ("LHFS")
1,961

 
2,835

 
(874
)
 
(31
)
Loans held for investment ("LHFI"):
 
 
 
 
 
 
 
Commercial and industrial ("C&I")
68,203

 
67,758

 
445

 
1

Commercial real estate ("CRE")
6,618

 
5,238

 
1,380

 
26

Commercial construction
3,137

 
3,964

 
(827
)
 
(21
)
Residential mortgages - guaranteed
452

 
497

 
(45
)
 
(9
)
Residential mortgages - nonguaranteed
28,187

 
27,041

 
1,146

 
4

Residential home equity products
9,669

 
10,865

 
(1,196
)
 
(11
)
Residential construction
197

 
327

 
(130
)
 
(40
)
Consumer student - guaranteed
7,039

 
6,559

 
480

 
7

Consumer other direct
10,100

 
8,597

 
1,503

 
17

Consumer indirect
12,010

 
11,952

 
58

 

Consumer credit cards
1,603

 
1,466

 
137

 
9

Total LHFI
147,215

 
144,264

 
2,951

 
2

Allowance for loan and lease losses ("ALLL")
(1,623
)
 
(1,772
)
 
(149
)
 
(8
)
Net LHFI
145,592

 
142,492

 
3,100

 
2

Goodwill
6,331

 
6,338

 
(7
)
 

Residential MSRs
2,062

 
1,628

 
434

 
27

Other assets 1
11,065

 
9,436

 
1,629

 
17

Total assets 2

$211,276

 

$208,252

 

$3,024

 
1
 %
LIABILITIES
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
Noninterest-bearing consumer and commercial deposits

$41,870

 

$43,984

 

($2,114
)
 
(5
)%
Interest-bearing consumer and commercial deposits:
 
 
 
 
 
 
 
NOW accounts
45,745

 
47,213

 
(1,468
)
 
(3
)
Money market accounts
49,960

 
52,487

 
(2,527
)
 
(5
)
Savings
6,591

 
6,505

 
86

 
1

Consumer time
6,499

 
5,735

 
764

 
13

Other time
8,667

 
5,854

 
2,813

 
48

Total consumer and commercial deposits
159,332

 
161,778

 
(2,446
)
 
(2
)
Brokered time deposits
1,046

 
959

 
87

 
9

Total deposits
160,378

 
162,737

 
(2,359
)
 
(1
)
Funds purchased
3,354

 
3,118

 
236

 
8

Securities sold under agreements to repurchase
1,730

 
1,422

 
308

 
22

Other short-term borrowings
2,856

 
909

 
1,947

 
NM

Long-term debt
14,289

 
11,280

 
3,009

 
27

Trading liabilities and derivative instruments
1,863

 
1,284

 
579

 
45

Other liabilities
2,667

 
2,980

 
(313
)
 
(11
)
Total liabilities
187,137

 
183,730

 
3,407

 
2

SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Preferred stock, no par value
2,025

 
1,975

 
50

 
3

Common stock, $1.00 par value
553

 
550

 
3

 
1

Additional paid-in capital
9,001

 
8,985

 
16

 

Retained earnings
19,111

 
17,021

 
2,090

 
12

Treasury stock, at cost, and other
(4,677
)
 
(3,274
)
 
1,403

 
43

Accumulated other comprehensive loss, net of tax
(1,874
)
 
(735
)
 
1,139

 
NM

Total shareholders' equity
24,139

 
24,522

 
(383
)
 
(2
)
Total liabilities and shareholders' equity

$211,276

 

$208,252

 

$3,024

 
1
 %
 
 
 
 
 
 
 
 
Common shares outstanding
458,626

 
476,001

 
(17,375
)
 
(4
)%
Common shares authorized
750,000

 
750,000

 

 

Preferred shares outstanding
20

 
20

 

 

Preferred shares authorized
50,000

 
50,000

 

 

Treasury shares of common stock
94,038

 
74,053

 
19,985

 
27

1 Beginning January 1, 2018, the Company reclassified equity securities previously presented in Securities available for sale to Other assets on the Consolidated Balance Sheets. For periods prior to January 1, 2018, these equity securities have been reclassified to Other assets for comparability.
2 Includes earning assets of $188,141 and $185,071 at September 30, 2018 and 2017, respectively.
3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

14



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
September 30
 
June 30
 
Increase/(Decrease)
 
March 31
 
December 31
 
September 30
2018
 
2018
 
Amount
 
 % 3
 
2018
 
2017
 
2017
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks

$6,206

 

$5,858

 

$348

 
6
 %
 

$5,851

 

$5,349

 

$7,071

Federal funds sold and securities borrowed or purchased under agreements to resell
1,374

 
1,365

 
9

 
1

 
1,428

 
1,538

 
1,182

Interest-bearing deposits in other banks
25

 
25

 

 

 
25

 
25

 
25

Trading assets and derivative instruments
5,676

 
5,050

 
626

 
12

 
5,112

 
5,093

 
6,318

Securities available for sale 1
30,984

 
30,942

 
42

 

 
30,934

 
30,947

 
30,927

LHFS
1,961

 
2,283

 
(322
)
 
(14
)
 
2,377

 
2,290

 
2,835

LHFI:
 
 
 
 
 
 
 
 
 
 
 
 
 
C&I
68,203

 
67,343

 
860

 
1

 
66,321

 
66,356

 
67,758

CRE
6,618

 
6,302

 
316

 
5

 
5,352

 
5,317

 
5,238

Commercial construction
3,137

 
3,456

 
(319
)
 
(9
)
 
3,651

 
3,804

 
3,964

Residential mortgages - guaranteed
452

 
525

 
(73
)
 
(14
)
 
611

 
560

 
497

Residential mortgages - nonguaranteed
28,187

 
27,556

 
631

 
2

 
27,165

 
27,136

 
27,041

Residential home equity products
9,669

 
9,918

 
(249
)
 
(3
)
 
10,241

 
10,626

 
10,865

Residential construction
197

 
217

 
(20
)
 
(9
)
 
256

 
298

 
327

Consumer student - guaranteed
7,039

 
6,892

 
147

 
2

 
6,693

 
6,633

 
6,559

Consumer other direct
10,100

 
9,448

 
652

 
7

 
8,941

 
8,729

 
8,597

Consumer indirect
12,010

 
11,712

 
298

 
3

 
11,869

 
12,140

 
11,952

Consumer credit cards
1,603

 
1,566

 
37

 
2

 
1,518

 
1,582

 
1,466

Total LHFI
147,215

 
144,935

 
2,280

 
2

 
142,618

 
143,181

 
144,264

ALLL
(1,623
)
 
(1,650
)
 
(27
)
 
(2
)
 
(1,694
)
 
(1,735
)
 
(1,772
)
Net LHFI
145,592

 
143,285

 
2,307

 
2

 
140,924

 
141,446

 
142,492

Goodwill
6,331

 
6,331

 

 

 
6,331

 
6,331

 
6,338

Residential MSRs
2,062

 
1,959

 
103

 
5

 
1,916

 
1,710

 
1,628

Other assets 1
11,065

 
10,407

 
658

 
6

 
9,987

 
11,233

 
9,436

Total assets 2

$211,276

 

$207,505

 

$3,771

 
2
 %
 

$204,885

 

$205,962

 

$208,252

LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing consumer and commercial deposits

$41,870

 

$44,755

 

($2,885
)
 
(6
)%
 

$43,494

 

$42,784

 

$43,984

Interest-bearing consumer and commercial deposits:
 
 
 
 
 
 
 
 
 
 
 
 

NOW accounts
45,745

 
45,430

 
315

 
1

 
46,672

 
47,379

 
47,213

Money market accounts
49,960

 
49,176

 
784

 
2

 
50,627

 
51,088

 
52,487

Savings
6,591

 
6,757

 
(166
)
 
(2
)
 
6,849

 
6,468

 
6,505

Consumer time
6,499

 
6,316

 
183

 
3

 
6,205

 
5,839

 
5,735

Other time
8,667

 
7,976

 
691

 
9

 
7,510

 
6,237

 
5,854

Total consumer and commercial deposits
159,332

 
160,410

 
(1,078
)
 
(1
)
 
161,357

 
159,795

 
161,778

Brokered time deposits
1,046

 
1,038

 
8

 
1

 
1,022

 
985

 
959

Total deposits
160,378

 
161,448

 
(1,070
)
 
(1
)
 
162,379

 
160,780

 
162,737

Funds purchased
3,354

 
1,251

 
2,103

 
NM

 
1,189

 
2,561

 
3,118

Securities sold under agreements to repurchase
1,730

 
1,567

 
163

 
10

 
1,677

 
1,503

 
1,422

Other short-term borrowings
2,856

 
2,470

 
386

 
16

 
706

 
717

 
909

Long-term debt
14,289

 
11,995

 
2,294

 
19

 
10,692

 
9,785

 
11,280

Trading liabilities and derivative instruments
1,863

 
1,958

 
(95
)
 
(5
)
 
1,737

 
1,283

 
1,284

Other liabilities
2,667

 
2,500

 
167

 
7

 
2,236

 
4,179

 
2,980

Total liabilities
187,137

 
183,189

 
3,948

 
2

 
180,616

 
180,808

 
183,730

SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, no par value
2,025

 
2,025

 

 

 
2,025

 
2,475

 
1,975

Common stock, $1.00 par value
553

 
552

 
1

 

 
552

 
550

 
550

Additional paid-in capital
9,001

 
8,980

 
21

 

 
8,960

 
9,000

 
8,985

Retained earnings
19,111

 
18,616

 
495

 
3

 
18,107

 
17,540

 
17,021

Treasury stock, at cost, and other
(4,677
)
 
(4,178
)
 
499

 
12

 
(3,853
)
 
(3,591
)
 
(3,274
)
Accumulated other comprehensive loss, net of tax
(1,874
)
 
(1,679
)
 
195

 
12

 
(1,522
)
 
(820
)
 
(735
)
Total shareholders’ equity
24,139

 
24,316

 
(177
)
 
(1
)
 
24,269

 
25,154

 
24,522

Total liabilities and shareholders’ equity

$211,276

 

$207,505

 

$3,771

 
2
 %
 

$204,885

 

$205,962

 

$208,252

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding
458,626

 
465,199

 
(6,573
)
 
(1
)%
 
469,708

 
470,931

 
476,001

Common shares authorized
750,000

 
750,000

 

 

 
750,000

 
750,000

 
750,000

Preferred shares outstanding
20

 
20

 

 

 
20

 
25

 
20

Preferred shares authorized
50,000

 
50,000

 

 

 
50,000

 
50,000

 
50,000

Treasury shares of common stock
94,038

 
87,071

 
6,967

 
8

 
82,223

 
79,133

 
74,053

1 Beginning January 1, 2018, the Company reclassified equity securities previously presented in Securities available for sale to Other assets on the Consolidated Balance Sheets. For periods prior to January 1, 2018, these equity securities have been reclassified to Other assets for comparability.
2 Includes earning assets of $188,141, $185,304, $182,913, $182,710, and $185,071 at September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, respectively.
3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

15



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID
 
Three Months Ended
 
Increase/(Decrease) From
 
September 30, 2018
 
June 30, 2018
 
Sequential Quarter
 
Prior Year Quarter
(Dollars in millions) (Unaudited)
Average
Balances  
 
Interest Income/
Expense
 
Yields/
Rates
 
Average
Balances
 
Interest Income/
Expense
 
Yields/
Rates
 
Average
Balances
 
Yields/
Rates
 
Average
Balances  
 
Yields/
Rates
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment ("LHFI"): 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial ("C&I")

$67,632



$659


3.87
%
 

$67,211

 

$633

 
3.78
%
 

$421

 
0.09

 

($645
)
 
0.48

Commercial real estate ("CRE")
6,418


68


4.19

 
5,729

 
58

 
4.06

 
689

 
0.13

 
1,191

 
0.62

Commercial construction
3,300


40


4.76

 
3,559

 
40

 
4.58

 
(259
)
 
0.18

 
(618
)
 
0.90

Residential mortgages - guaranteed
502


3


2.76

 
588

 
5

 
3.33

 
(86
)
 
(0.57
)
 
(10
)
 
(0.81
)
Residential mortgages - nonguaranteed
27,584


268


3.89

 
27,022

 
258

 
3.81

 
562

 
0.08

 
897

 
0.07

Residential home equity products
9,632


121


4.97

 
9,918

 
119

 
4.81

 
(286
)
 
0.16

 
(1,146
)
 
0.57

Residential construction
193


2


4.75

 
216

 
3

 
5.26

 
(23
)
 
(0.51
)
 
(140
)
 
0.07

Consumer student - guaranteed
6,912


88


5.05

 
6,763

 
83

 
4.92

 
149

 
0.13

 
377

 
0.61

Consumer other direct
9,726


135


5.49

 
9,169

 
120

 
5.26

 
557

 
0.23

 
1,300

 
0.58

Consumer indirect
11,770


114


3.86

 
11,733

 
108

 
3.68

 
37

 
0.18

 
(54
)
 
0.35

Consumer credit cards
1,573


46


11.71

 
1,524

 
43

 
11.45

 
49

 
0.26

 
123

 
1.39

Nonaccrual
753


5


2.70

 
724

 
6

 
3.35

 
29

 
(0.65
)
 
14

 
(3.20
)
Total LHFI
145,995


1,549


4.21

 
144,156

 
1,476

 
4.11

 
1,839

 
0.10

 
1,289

 
0.42

Securities available for sale: 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
30,927


207


2.68

 
30,959

 
205

 
2.65

 
(32
)
 
0.03

 
838

 
0.19

Tax-exempt
625


5


2.99

 
637

 
5

 
2.99

 
(12
)
 

 
121

 

Total securities available for sale
31,552


212


2.69

 
31,596

 
210

 
2.66

 
(44
)
 
0.03

 
959

 
0.20

Federal funds sold and securities borrowed or purchased under agreements to resell
1,426


7


1.79

 
1,471

 
6

 
1.58

 
(45
)
 
0.21

 
237

 
0.90

Loans held for sale ("LHFS")
2,022


22


4.40

 
2,117

 
24

 
4.54

 
(95
)
 
(0.14
)
 
(455
)
 
0.51

Interest-bearing deposits in other banks
25




3.90

 
25

 

 
2.32

 

 
1.58

 

 
2.02

Interest earning trading assets
4,789


39


3.18

 
4,677

 
38

 
3.23

 
112

 
(0.05
)
 
(502
)
 
0.80

Other earning assets 2
535

 
5

 
3.79

 
524

 
5

 
3.97

 
11

 
(0.18
)
 
(45
)
 
0.73

Total earning assets
186,344


1,834


3.90

 
184,566

 
1,759

 
3.82

 
1,778

 
0.08

 
1,483

 
0.39

Allowance for loan and lease losses ("ALLL")
(1,665
)

 
 
 
 
(1,682
)
 
 
 
 
 
(17
)
 
 
 
(83
)
 
 
Cash and due from banks
4,575


 
 
 
 
4,223

 
 
 
 
 
352

 
 
 
(448
)
 
 
Other assets
18,192


 
 
 
 
17,573

 
 
 
 
 
619

 
 
 
1,691

 
 
Noninterest earning trading assets and derivative instruments
668


 
 
 
 
512

 
 
 
 
 
156

 
 
 
(280
)
 
 
Unrealized (losses)/gains on securities available for sale, net
(719
)

 
 
 
 
(644
)
 
 
 
 
 
(75
)
 
 
 
(872
)
 
 
Total assets

$207,395


 
 
 
 

$204,548

 
 
 
 
 

$2,847

 
 
 

$1,657

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOW accounts

$45,345



$65


0.57
%
 

$45,344

 

$52

 
0.46
%
 

$1

 
0.11

 

$741

 
0.24

Money market accounts
49,926


73


0.58

 
49,845

 
60

 
0.49

 
81

 
0.09

 
(3,352
)
 
0.26

Savings
6,658




0.02

 
6,805

 
1

 
0.03

 
(147
)
 
(0.01
)
 
123

 

Consumer time
6,413


17


1.03

 
6,280

 
15

 
0.95

 
133

 
0.08

 
738

 
0.27

Other time
8,357


33


1.55

 
7,643

 
27

 
1.41

 
714

 
0.14

 
2,805

 
0.41

Total interest-bearing consumer and commercial deposits
116,699


188


0.64

 
115,917

 
155

 
0.54

 
782

 
0.10

 
1,055

 
0.27

Brokered time deposits
1,041


4


1.54

 
1,029

 
4

 
1.46

 
12

 
0.08

 
94

 
0.26

Foreign deposits
172


1


1.94

 
139

 

 
1.90

 
33

 
0.04

 
(123
)
 
0.81

Total interest-bearing deposits
117,912


193


0.65

 
117,085

 
159

 
0.55

 
827

 
0.10

 
1,026

 
0.27

Funds purchased
1,352


7


1.94

 
1,102

 
5

 
1.73

 
250

 
0.21

 
(337
)
 
0.79

Securities sold under agreements to repurchase
1,638


8


1.85

 
1,656

 
7

 
1.71

 
(18
)
 
0.14

 
174

 
0.78

Interest-bearing trading liabilities
1,233


10


3.33

 
1,314

 
10

 
3.12

 
(81
)
 
0.21

 
321

 
0.49

Other short-term borrowings
2,259


9


1.57

 
1,807

 
7

 
1.54

 
452

 
0.03

 
462

 
1.01

Long-term debt
12,922


95


2.92

 
11,452

 
83

 
2.92

 
1,470

 

 
1,718

 
0.22

Total interest-bearing liabilities
137,316


322


0.93

 
134,416

 
271

 
0.81

 
2,900

 
0.12

 
3,364

 
0.32

Noninterest-bearing deposits
42,649


 
 
 
 
43,040

 
 
 
 
 
(391
)
 
 
 
(1,126
)
 
 
Other liabilities
2,465


 
 
 
 
2,309

 
 
 
 
 
156

 
 
 
(581
)
 
 
Noninterest-bearing trading liabilities and derivative instruments
690


 
 
 
 
688

 
 
 
 
 
2

 
 
 
298

 
 
Shareholders’ equity
24,275


 
 
 
 
24,095

 
 
 
 
 
180

 
 
 
(298
)
 
 
Total liabilities and shareholders’ equity

$207,395


 
 
 
 

$204,548

 
 
 
 
 

$2,847

 
 
 

$1,657

 
 
Interest Rate Spread
 

 

2.97
%
 
 
 
 
 
3.01
%
 
 
 
(0.04
)
 
 
 
0.07

Net Interest Income
 


$1,512


 
 
 
 

$1,488

 
 
 
 
 
 
 
 
 
 
Net Interest Income-FTE 3
 
 

$1,534

 
 
 
 
 

$1,510

 
 
 
 
 
 
 
 
 
 
Net Interest Margin 4
 

 

3.22
%
 
 
 
 
 
3.23
%
 
 
 
(0.01
)
 
 
 
0.15

Net Interest Margin-FTE 3, 4
 
 
 
 
3.27

 
 
 
 
 
3.28

 
 
 
(0.01
)
 
 
 
0.12

1 Interest income includes loan fees of $43 million and $39 million for the three months ended September 30, 2018 and June 30, 2018, respectively.
2 Beginning January 1, 2018, the Company began presenting other equity securities previously presented in securities available for sale as other earning assets. For periods prior to January 1, 2018, these equity securities have been reclassified to other earning assets for comparability.  
3 See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures. Approximately 95% of the total FTE adjustment for both the three months ended September 30, 2018 and June 30, 2018 was attributed to C&I loans.
4 Net interest margin is calculated by dividing annualized Net interest income by average Total earning assets.

16



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID, continued
 
Three Months Ended
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
(Dollars in millions) (Unaudited)
Average
Balances  
 
Interest Income/
Expense
 
Yields/
Rates
 
Average
Balances  
 
Interest Income/
Expense
 
Yields/
Rates
 
Average
Balances  
 
Interest Income/
Expense
 
Yields/
Rates
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LHFI: 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C&I

$66,269

 

$588

 
3.60
%
 

$67,238

 

$575

 
3.39
%
 

$68,277



$583


3.39
%
CRE
5,201

 
49

 
3.84

 
5,209

 
47

 
3.57

 
5,227


47


3.57

Commercial construction
3,749

 
40

 
4.27

 
3,947

 
39

 
3.92

 
3,918


38


3.86

Residential mortgages - guaranteed
637

 
5

 
3.12

 
546

 
3

 
2.12

 
512


5


3.57

Residential mortgages - nonguaranteed
26,863

 
254

 
3.79

 
26,858

 
254

 
3.78

 
26,687


255


3.82

Residential home equity products
10,243

 
116

 
4.60

 
10,531

 
116

 
4.37

 
10,778


120


4.40

Residential construction
261

 
3

 
4.47

 
303

 
3

 
4.15

 
333


4


4.68

Consumer student - guaranteed
6,655

 
78

 
4.76

 
6,576

 
76

 
4.60

 
6,535


73


4.44

Consumer other direct
8,804

 
110

 
5.08

 
8,651

 
108

 
4.94

 
8,426


104


4.91

Consumer indirect
12,001

 
108

 
3.63

 
11,999

 
107

 
3.53

 
11,824


105


3.51

Consumer credit cards
1,526

 
43

 
11.26

 
1,504

 
39

 
10.40

 
1,450


37


10.32

Nonaccrual
711

 
4

 
2.25

 
677

 
9

 
5.12

 
739


11


5.90

Total LHFI
142,920

 
1,398

 
3.97

 
144,039

 
1,376

 
3.79

 
144,706


1,382


3.79

Securities available for sale: 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
30,849

 
201

 
2.61

 
30,309

 
192

 
2.54

 
30,089


187


2.49

Tax-exempt
628

 
5

 
2.98

 
589

 
4

 
2.97

 
504


4


2.99

Total securities available for sale
31,477

 
206

 
2.62

 
30,898

 
196

 
2.53

 
30,593


191


2.49

Federal funds sold and securities borrowed or purchased under agreements to resell
1,334

 
4

 
1.18

 
1,198

 
2

 
0.87

 
1,189


3


0.89

LHFS
2,025

 
21

 
4.12

 
2,622

 
30

 
4.53

 
2,477


24


3.89

Interest-bearing deposits in other banks
25

 

 
1.85

 
25

 

 
1.62

 
25




1.88

Interest earning trading assets
4,564

 
34

 
3.05

 
4,996

 
32

 
2.53

 
5,291


31


2.38

Other earning assets 2
529

 
5

 
3.50

 
528

 
4

 
3.52

 
580

 
4

 
3.06

Total earning assets
182,874

 
1,668

 
3.70

 
184,306

 
1,640

 
3.53

 
184,861


1,635


3.51

ALLL
(1,726
)
 
 
 
 
 
(1,768
)
 
 
 
 
 
(1,748
)

 
 
 
Cash and due from banks
5,329

 
 
 
 
 
5,018

 
 
 
 
 
5,023


 
 
 
Other assets
17,256

 
 
 
 
 
16,794

 
 
 
 
 
16,501


 
 
 
Noninterest earning trading assets and derivative instruments
772

 
 
 
 
 
858

 
 
 
 
 
948


 
 
 
Unrealized (losses)/gains on securities available for sale, net
(373
)
 
 
 
 
 
11

 
 
 
 
 
153


 
 
 
Total assets

$204,132

 
 
 
 
 

$205,219

 
 
 
 
 

$205,738


 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
NOW accounts

$46,590

 

$45

 
0.39
%
 

$46,238

 

$42

 
0.36
%
 

$44,604



$37


0.33
%
Money market accounts
50,543

 
48

 
0.39

 
52,025

 
43

 
0.33

 
53,278


43


0.32

Savings
6,587

 

 
0.02

 
6,487

 

 
0.02

 
6,535




0.02

Consumer time
6,085

 
13

 
0.87

 
5,785

 
12

 
0.82

 
5,675


11


0.76

Other time
7,026

 
22

 
1.25

 
6,090

 
18

 
1.19

 
5,552


16


1.14

Total interest-bearing consumer and commercial deposits
116,831

 
128

 
0.44

 
116,625

 
115

 
0.39

 
115,644


107


0.37

Brokered time deposits
1,006

 
3

 
1.35

 
971

 
4

 
1.32

 
947


3


1.28

Foreign deposits
51

 

 
1.42

 

 

 

 
295


1


1.13

Total interest-bearing deposits
117,888

 
131

 
0.45

 
117,596

 
119

 
0.40

 
116,886


111


0.38

Funds purchased
876

 
3

 
1.45

 
1,143

 
3

 
1.17

 
1,689


5


1.15

Securities sold under agreements to repurchase
1,595

 
5

 
1.39

 
1,483

 
4

 
1.14

 
1,464


4


1.07

Interest-bearing trading liabilities
1,110

 
8

 
2.84

 
969

 
7

 
2.73

 
912


6


2.84

Other short-term borrowings
2,084

 
6

 
1.11

 
815

 
1

 
0.22

 
1,797


3


0.56

Long-term debt
10,506

 
74

 
2.84

 
10,981

 
72

 
2.60

 
11,204


76


2.70

Total interest-bearing liabilities
134,059

 
227

 
0.69

 
132,987

 
206

 
0.61

 
133,952


205


0.61

Noninterest-bearing deposits
42,338

 
 
 
 
 
44,120

 
 
 
 
 
43,775


 
 
 
Other liabilities
2,499

 
 
 
 
 
2,860

 
 
 
 
 
3,046


 
 
 
Noninterest-bearing trading liabilities and derivative instruments
631

 
 
 
 
 
446

 
 
 
 
 
392


 
 
 
Shareholders’ equity
24,605

 
 
 
 
 
24,806

 
 
 
 
 
24,573


 
 
 
Total liabilities and shareholders’ equity

$204,132

 
 
 
 
 

$205,219

 
 
 
 
 

$205,738


 
 
 
Interest Rate Spread
 
 
 
 
3.01
%
 
 
 
 
 
2.92
%
 
 
 
 

2.90
%
Net Interest Income
 
 

$1,441

 
 
 
 
 

$1,434

 
 
 
 


$1,430


 
Net Interest Income-FTE 3
 
 

$1,461

 
 
 
 
 

$1,472

 
 
 
 
 

$1,467

 
 
Net Interest Margin 4
 
 
 
 
3.20
%
 
 
 
 
 
3.09
%
 
 
 
 

3.07
%
Net Interest Margin-FTE 3, 4
 
 
 
 
3.24

 
 
 
 
 
3.17

 
 
 
 
 
3.15

1 
Interest income includes loan fees of $39 million, $42 million, and $45 million for the three months ended March 31, 2018, December 31, 2017, and September 30, 2017, respectively.
2 
Beginning January 1, 2018, the Company began presenting other equity securities previously presented in securities available for sale as other earning assets. For periods prior to January 1, 2018, these equity securities have been reclassified to other earning assets for comparability.
3 
See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures. Approximately 95% of the total FTE adjustment for the three months ended March 31, 2018, December 31, 2017, and September 30, 2017 was attributed to C&I loans.
4 
Net interest margin is calculated by dividing annualized Net interest income by average Total earning assets.

17



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID, continued
 
Nine Months Ended
 
 
 
 
 
September 30, 2018
 
September 30, 2017
 
(Decrease)/Increase
(Dollars in millions) (Unaudited)
Average
Balances
 
Interest
Income/
Expense
 
Yields/
Rates
 
Average
Balances
 
Interest
Income/
Expense
 
Yields/
Rates
 
Average
Balances
 
Yields/
Rates
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LHFI: 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C&I

$67,042

 

$1,880

 
3.75
%
 

$68,822

 

$1,711

 
3.32
%
 

($1,780
)
 
0.43

CRE
5,787

 
175

 
4.04

 
5,141

 
130

 
3.38

 
646

 
0.66

Commercial construction
3,534

 
120

 
4.53

 
4,032

 
109

 
3.63

 
(498
)
 
0.90

Residential mortgages - guaranteed
576

 
13

 
3.09

 
537

 
13

 
3.19

 
39

 
(0.10
)
Residential mortgages - nonguaranteed
27,159

 
780

 
3.83

 
26,234

 
749

 
3.81

 
925

 
0.02

Residential home equity products
9,929

 
356

 
4.79

 
11,117

 
354

 
4.26

 
(1,188
)
 
0.53

Residential construction
223

 
8

 
4.81

 
360

 
12

 
4.29

 
(137
)
 
0.52

Consumer student - guaranteed
6,778

 
249

 
4.91

 
6,426

 
209

 
4.36

 
352

 
0.55

Consumer other direct
9,236

 
365

 
5.28

 
8,100

 
298

 
4.92

 
1,136

 
0.36

Consumer indirect
11,834

 
330

 
3.72

 
11,322

 
295

 
3.48

 
512

 
0.24

Consumer credit cards
1,541

 
133

 
11.47

 
1,404

 
105

 
10.03

 
137

 
1.44

Nonaccrual
729

 
15

 
2.77

 
781

 
24

 
4.04

 
(52
)
 
(1.27
)
Total LHFI
144,368

 
4,424

 
4.10

 
144,276

 
4,009

 
3.72

 
92

 
0.38

Securities available for sale: 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
30,912

 
614

 
2.65

 
30,037

 
551

 
2.45

 
875

 
0.20

Tax-exempt
630

 
14

 
2.99

 
380

 
9

 
3.01

 
250

 
(0.02
)
Total securities available for sale
31,542

 
628

 
2.66

 
30,417

 
560

 
2.45

 
1,125

 
0.21

Federal funds sold and securities borrowed or purchased under
agreements to resell
1,411

 
16

 
1.52

 
1,221

 
6

 
0.63

 
190

 
0.89

LHFS
2,055

 
67

 
4.35

 
2,436

 
70

 
3.82

 
(381
)
 
0.53

Interest-bearing deposits in other banks
25

 
1

 
2.70

 
25

 

 
1.05

 

 
1.65

Interest earning trading assets
4,677

 
110

 
3.16

 
5,204

 
89

 
2.27

 
(527
)
 
0.89

Other earning assets 2
529

 
15

 
3.75

 
601

 
13

 
3.00

 
(72
)
 
0.75

Total earning assets
184,607

 
5,261

 
3.81

 
184,180

 
4,747

 
3.45

 
427

 
0.36

ALLL
(1,691
)
 
 
 
 
 
(1,724
)
 
 
 
 
 
(33
)
 
 
Cash and due from banks
4,706

 
 
 
 
 
5,158

 
 
 
 
 
(452
)
 
 
Other assets
17,678

 
 
 
 
 
16,235

 
 
 
 
 
1,443

 
 
Noninterest earning trading assets and derivative instruments
650

 
 
 
 
 
918

 
 
 
 
 
(268
)
 
 
Unrealized (losses)/gains on securities available for sale, net
(580
)
 
 
 
 
 
66

 
 
 
 
 
(646
)
 
 
Total assets

$205,370

 
 
 
 
 

$204,833

 
 
 
 
 

$537

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOW accounts

$45,755

 

$162

 
0.47
%
 

$44,595

 

$90

 
0.27
%
 

$1,160

 
0.20

Money market accounts
50,102

 
182

 
0.49

 
54,120

 
114

 
0.28

 
(4,018
)
 
0.21

Savings
6,684

 
1

 
0.03

 
6,530

 
1

 
0.02

 
154

 
0.01

Consumer time
6,261

 
45

 
0.95

 
5,573

 
30

 
0.72

 
688

 
0.23

Other time
7,680

 
81

 
1.41

 
4,830

 
38

 
1.06

 
2,850

 
0.35

Total interest-bearing consumer and commercial deposits
116,482

 
471

 
0.54

 
115,648

 
273

 
0.32

 
834

 
0.22

Brokered time deposits
1,026

 
11

 
1.45

 
931

 
9

 
1.28

 
95

 
0.17

Foreign deposits
121

 
2

 
1.85

 
563

 
4

 
0.86

 
(442
)
 
0.99

Total interest-bearing deposits
117,629

 
484

 
0.55

 
117,142

 
286

 
0.33

 
487

 
0.22

Funds purchased
1,112

 
15

 
1.74

 
1,242

 
9

 
0.97

 
(130
)
 
0.77

Securities sold under agreements to repurchase
1,630

 
20

 
1.66

 
1,583

 
10

 
0.85

 
47

 
0.81

Interest-bearing trading liabilities
1,219

 
28

 
3.11

 
968

 
20

 
2.70

 
251

 
0.41

Other short-term borrowings
2,051

 
22

 
1.41

 
1,852

 
7

 
0.54

 
199

 
0.87

Long-term debt
11,635

 
252

 
2.89

 
11,094

 
216

 
2.60

 
541

 
0.29

Total interest-bearing liabilities
135,276

 
821

 
0.81

 
133,881

 
548

 
0.55

 
1,395

 
0.26

Noninterest-bearing deposits
42,677

 
 
 
 
 
43,497

 
 
 
 
 
(820
)
 
 
Other liabilities
2,424

 
 
 
 
 
2,961

 
 
 
 
 
(537
)
 
 
Noninterest-bearing trading liabilities and derivative instruments
669

 
 
 
 
 
363

 
 
 
 
 
306

 
 
Shareholders’ equity
24,324

 
 
 
 
 
24,131

 
 
 
 
 
193

 
 
Total liabilities and shareholders’ equity

$205,370

 
 
 
 
 

$204,833

 
 
 
 
 

$537

 
 
Interest Rate Spread
 
 
 
 
3.00
%
 
 
 
 
 
2.90
%
 
 
 
0.10

Net Interest Income
 
 

$4,440

 
 
 
 
 

$4,199

 
 
 
 
 
 
Net Interest Income-FTE 3
 
 

$4,505

 
 
 
 
 

$4,306

 
 
 
 
 
 
Net Interest Margin 4
 
 
 
 
3.22
%
 
 
 
 
 
3.05
%
 
 
 
0.17

Net Interest Margin-FTE 3, 4
 
 
 
 
3.26

 
 
 
 
 
3.13

 
 
 
0.13

1 Interest income includes loan fees of $121 million and $135 million for the nine months ended September 30, 2018 and 2017, respectively.
2 Beginning January 1, 2018, the Company began presenting other equity securities previously presented in securities available for sale as other earning assets. For periods prior to January 1, 2018, these equity securities have been reclassified to other earning assets for comparability.  
3 See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures. Approximately 95% of the total FTE adjustment for both the nine months ended September 30, 2018 and 2017 was attributed to C&I loans.
4 Net interest margin is calculated by dividing annualized Net interest income by average Total earning assets.

18



SunTrust Banks, Inc. and Subsidiaries
OTHER FINANCIAL DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
Nine Months Ended
 
 
 
 
 
September 30
 
(Decrease)/Increase
 
September 30
 
Increase/(Decrease)
(Dollars in millions) (Unaudited)
2018

2017
 
Amount
 
 % 4
 
2018

2017
 
Amount
 
 % 4
CREDIT DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses, beginning of period

$1,722



$1,803

 

($81
)
 
(4
)%
 

$1,814



$1,776

 

$38

 
2
 %
Provision/(benefit) for unfunded commitments


1

 
(1
)
 
(100
)
 
(7
)

6

 
(13
)
 
NM

Provision for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Commercial
36


5

 
31

 
NM

 
37


89

 
(52
)
 
(58
)
Consumer
25


114

 
(89
)
 
(78
)
 
91


235

 
(144
)
 
(61
)
Total provision for loan losses
61


119

 
(58
)
 
(49
)
 
128


324

 
(196
)
 
(60
)
Charge-offs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
(51
)

(33
)
 
18

 
55

 
(95
)

(122
)
 
(27
)
 
(22
)
Consumer
(71
)

(76
)
 
(5
)
 
(7
)
 
(234
)

(235
)
 
(1
)
 

Total charge-offs
(122
)

(109
)
 
13

 
12

 
(329
)

(357
)
 
(28
)
 
(8
)
Recoveries:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
9


11

 
(2
)
 
(18
)
 
19


32

 
(13
)
 
(41
)
Consumer
25


20

 
5

 
25

 
70


64

 
6

 
9

Total recoveries
34


31

 
3

 
10

 
89


96

 
(7
)
 
(7
)
Net charge-offs
(88
)

(78
)
 
10

 
13

 
(240
)

(261
)
 
(21
)
 
(8
)
Allowance for credit losses, end of period

$1,695



$1,845

 

($150
)
 
(8
)%
 

$1,695



$1,845

 

($150
)
 
(8
)%
Components:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses ("ALLL")
 
 
 
 
 
 
 
 

$1,623



$1,772

 

($149
)
 
(8
)%
Unfunded commitments reserve
 
 
 
 
 
 
 
 
72


73

 
(1
)
 
(1
)
Allowance for credit losses
 
 
 
 
 
 
 
 

$1,695

 

$1,845

 

($150
)
 
(8
)%
Net charge-offs to average loans held for investment ("LHFI") (annualized):
 
 
 
 
 


 
 
 
 
 
 
 
 
Commercial
0.22
%

0.11
%
 
0.11

 
100
 %
 
0.13
%

0.15
%
 
(0.02
)
 
(13
)%
Consumer
0.27


0.33

 
(0.06
)
 
(18
)
 
0.33


0.35

 
(0.02
)
 
(6
)
Total net charge-offs to total average LHFI
0.24


0.21

 
0.03

 
14

 
0.22


0.24

 
(0.02
)
 
(8
)
Period Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual/nonperforming loans ("NPLs"):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 

$299

 

$298

 

$1

 
 %
Consumer
 
 
 
 
 
 
 
 
396

 
399

 
(3
)
 
(1
)
Total nonaccrual/NPLs
 
 
 
 
 
 
 
 
695

 
697

 
(2
)
 

Other real estate owned (“OREO”)
 
 
 
 
 
 
 
 
52

 
57

 
(5
)
 
(9
)
Other repossessed assets
 
 
 
 
 
 
 
 
7

 
7

 

 

Nonperforming loans held for sale ("nonperforming LHFS")
 
 
 
 
 
 
 
 

 
31

 
(31
)
 
(100
)
Total nonperforming assets ("NPAs")
 
 
 
 
 
 
 
 

$754

 

$792

 

($38
)
 
(5
)%
Accruing restructured loans
 
 
 
 
 
 
 
 

$2,327

 

$2,501

 

($174
)
 
(7
)%
Nonaccruing restructured loans 1
 
 
 
 
 
 
 
 
345

 
304

 
41

 
13

Accruing LHFI past due > 90 days (guaranteed)
 
 
 
 
 
 
 
 
1,440

 
1,304

 
136

 
10

Accruing LHFI past due > 90 days (non-guaranteed)
 
 
 
 
 
 
 
 
42

 
39

 
3

 
8

Accruing LHFS past due > 90 days
 
 
 
 
 
 
 
 
2

 

 
2

 
NM

NPLs to period-end LHFI
 
 
 
 
 
 
 
 
0.47
%
 
0.48
%
 
(0.01
)
 
(2
)%
NPAs to period-end LHFI plus OREO, other repossessed assets, and nonperforming LHFS
 
 
 
 
 
 
 
 
0.51

 
0.55

 
(0.04
)
 
(7
)
ALLL to period-end LHFI 2, 3
 
 
 
 
 
 
 
 
1.10

 
1.23

 
(0.13
)
 
(11
)
ALLL to NPLs 2, 3
 
 
 
 
 
 
 
 
2.35x

 
2.55x

 
(0.20x)

 
(8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Nonaccruing restructured loans are included in total nonaccrual/NPLs.
2 This ratio is computed using the ALLL.
3 Loans measured at fair value were excluded from the calculation as no allowance is recorded for loans measured at fair value. The Company believes that this presentation more appropriately reflects the relationship between the ALLL and loans that attract an allowance.
4 "NM" - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

19



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER OTHER FINANCIAL DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
Three Months Ended
 
September 30
 
June 30
 
(Decrease)/Increase
 
March 31
 
December 31
 
September 30
(Dollars in millions) (Unaudited)
2018
 
2018
 
Amount
 
 % 4
 
2018
 
2017
 
2017
CREDIT DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses, beginning of period

$1,722

 

$1,763

 

($41
)
 
(2
)%
 

$1,814

 

$1,845

 

$1,803

Provision/(benefit) for unfunded commitments

 
3

 
(3
)
 
(100
)
 
(10
)
 
6

 
1

Provision/(benefit) for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
36

 
17

 
19

 
NM

 
(16
)
 
19

 
5

Consumer
25

 
12

 
13

 
NM

 
54

 
55

 
114

Total provision for loan losses
61

 
29

 
32

 
NM

 
38

 
74

 
119

Charge-offs:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
(51
)
 
(21
)
 
30

 
NM

 
(23
)
 
(44
)
 
(33
)
Consumer
(71
)
 
(80
)
 
(9
)
 
(11
)
 
(83
)
 
(90
)
 
(76
)
Total charge-offs
(122
)
 
(101
)
 
21

 
21

 
(106
)
 
(134
)
 
(109
)
Recoveries:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
9

 
4

 
5

 
NM

 
6

 
7

 
11

Consumer
25

 
24

 
1

 
4

 
21

 
20

 
20

Total recoveries
34

 
28

 
6

 
21

 
27

 
27

 
31

Net charge-offs
(88
)
 
(73
)
 
15

 
21

 
(79
)
 
(107
)
 
(78
)
Other

 

 

 

 

 
(4
)
 

Allowance for credit losses, end of period

$1,695

 

$1,722

 

($27
)
 
(2
)%
 

$1,763

 

$1,814

 

$1,845

Components:
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLL

$1,623

 

$1,650

 

($27
)
 
(2
)%
 

$1,694

 

$1,735

 

$1,772

Unfunded commitments reserve
72

 
72

 

 

 
69

 
79

 
73

Allowance for credit losses

$1,695

 

$1,722

 

($27
)
 
(2
)%
 

$1,763

 

$1,814

 

$1,845

Net charge-offs to average LHFI (annualized):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
0.22
%
 
0.09
%
 
0.13

 
NM

 
0.09
%
 
0.19
%
 
0.11
%
Consumer
0.27

 
0.34

 
(0.07
)
 
(21
)
 
0.37

 
0.41

 
0.33

Total net charge-offs to total average LHFI
0.24

 
0.20

 
0.04

 
20

 
0.22

 
0.29

 
0.21

Period Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual/NPLs:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial

$299

 

$341

 

($42
)
 
(12
)%
 

$262

 

$240

 

$298

Consumer
396

 
414

 
(18
)
 
(4
)
 
450

 
434

 
399

Total nonaccrual/NPLs
695

 
755

 
(60
)
 
(8
)
 
712

 
674

 
697

OREO
52

 
53

 
(1
)
 
(2
)
 
59

 
57

 
57

Other repossessed assets
7

 
6

 
1

 
17

 
7

 
10

 
7

Nonperforming LHFS

 

 

 

 

 

 
31

Total NPAs

$754

 

$814

 

($60
)
 
(7
)%
 

$778

 

$741

 

$792

Accruing restructured loans

$2,327

 

$2,418

 

($91
)
 
(4
)%
 

$2,476

 

$2,468

 

$2,501

Nonaccruing restructured loans 1
345

 
326

 
19

 
6

 
279

 
286

 
304

Accruing LHFI past due > 90 days (guaranteed)
1,440

 
1,201

 
239

 
20

 
1,312

 
1,374

 
1,304

Accruing LHFI past due > 90 days (non-guaranteed)
42

 
41

 
1

 
2

 
36

 
31

 
39

Accruing LHFS past due > 90 days
2

 
1

 
1

 
100

 
3

 
2

 

NPLs to period-end LHFI
0.47
%
 
0.52
%
 
(0.05
)
 
(10
)%
 
0.50
%
 
0.47
%
 
0.48
%
NPAs to period-end LHFI plus OREO, other repossessed assets, and nonperforming LHFS
0.51

 
0.56

 
(0.05
)
 
(9
)
 
0.55

 
0.52

 
0.55

ALLL to period-end LHFI 2, 3
1.10

 
1.14

 
(0.04
)
 
(4
)
 
1.19

 
1.21

 
1.23

ALLL to NPLs 2, 3
2.35x

 
2.20x

 
0.15x

 
(7
)
 
2.40x

 
2.59x

 
2.55x

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Nonaccruing restructured loans are included in total nonaccrual/NPLs.
2 This ratio is computed using the ALLL.
3 Loans measured at fair value were excluded from the calculation as no allowance is recorded for loans measured at fair value. The Company believes that this presentation more appropriately reflects the relationship between the ALLL and loans that attract an allowance.
4 "NM" - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

20



SunTrust Banks, Inc. and Subsidiaries
OTHER FINANCIAL DATA, continued
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30

Nine Months Ended September 30
(Dollars in millions) (Unaudited)
Residential MSRs - Fair Value

Commercial Mortgage Servicing Rights and Other

Total

Residential MSRs - Fair Value

Commercial Mortgage Servicing Rights and Other

Total
OTHER INTANGIBLE ASSETS ROLLFORWARD
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period

$1,608



$81



$1,689



$1,572



$85



$1,657

Amortization


(6
)

(6
)



(16
)

(16
)
Servicing rights originated
90


3


93


252


10


262

Fair value changes due to inputs and assumptions 1
(11
)



(11
)

(27
)



(27
)
Other changes in fair value 2
(59
)



(59
)

(168
)



(168
)
Servicing rights sold






(1
)



(1
)
Other 3

 

 

 

 
(1
)
 
(1
)
Balance, September 30, 2017

$1,628



$78



$1,706



$1,628



$78



$1,706

 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period

$1,959



$77



$2,036



$1,710



$81



$1,791

Amortization


(3
)

(3
)



(13
)

(13
)
Servicing rights originated
100


4


104


250


10


260

Servicing rights purchased
14

 

 
14

 
89

 

 
89

Fair value changes due to inputs and assumptions 1
52




52


198




198

Other changes in fair value 2
(62
)



(62
)

(183
)



(183
)
Servicing rights sold
(1
)



(1
)

(2
)



(2
)
Balance, September 30, 2018

$2,062



$78



$2,140



$2,062



$78



$2,140

1 Primarily reflects changes in discount rates and prepayment speed assumptions, due to changes in interest rates.
2 Represents changes due to the collection of expected cash flows, net of accretion, due to the passage of time.
3 Represents measurement period adjustment on other intangible assets previously acquired in Pillar/Cohen acquisition.


 
Three Months Ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
(Shares in thousands) (Unaudited)
2018
 
2018
 
2018
 
2017
 
2017
COMMON SHARES OUTSTANDING ROLLFORWARD
 
 
 
 
 
 
 
 
 
Balance, beginning of period
465,199

 
469,708

 
470,931

 
476,001

 
481,644

Common shares issued
471

 
402

 
3,615

 
244

 
125

Repurchases of common stock
(7,044
)
 
(4,911
)
 
(4,838
)
 
(5,314
)
 
(5,768
)
Balance, end of period
458,626

 
465,199

 
469,708

 
470,931

 
476,001

 



21



SunTrust Banks, Inc. and Subsidiaries
APPENDIX A TO THE EARNINGS RELEASE - RECONCILEMENT OF NON-U.S. GAAP MEASURES 1
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
September 30
(Dollars in millions) (Unaudited)
2018
 
2018
 
2018
 
2017
 
2017
 
2018

2017
Net interest income

$1,512

 

$1,488

 

$1,441

 

$1,434

 

$1,430

 

$4,440

 

$4,199

Fully taxable-equivalent ("FTE") adjustment
22

 
22

 
20

 
38

 
37

 
65

 
107

Net interest income-FTE 2
1,534

 
1,510

 
1,461

 
1,472

 
1,467

 
4,505

 
4,306

Noninterest income
782

 
829

 
796

 
833

 
846

 
2,408

 
2,520

Total revenue-FTE 2

$2,316

 

$2,339

 

$2,257

 

$2,305

 

$2,313

 

$6,913

 

$6,826

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average common shareholders’ equity
13.01
 %
 
12.73
 %
 
11.23
 %
 
12.54
 %
 
9.03
 %
 
12.33
 %

8.77
 %
Impact of removing average intangible assets and related pre-tax amortization, other than residential MSRs and other servicing rights
5.05

 
5.01

 
4.37

 
4.70

 
3.42

 
4.81


3.32

Return on average tangible common shareholders' equity 3
18.06
%
 
17.74
%
 
15.60
%
 
17.24
%
 
12.45
%
 
17.14
%

12.09
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.22
 %
 
3.23
 %
 
3.20
 %
 
3.09
 %
 
3.07
 %
 
3.22
 %
 
3.05
 %
Impact of FTE adjustment
0.05

 
0.05

 
0.04

 
0.08

 
0.08

 
0.04

 
0.08

Net interest margin-FTE 2
3.27
 %
 
3.28
 %
 
3.24
 %
 
3.17
 %
 
3.15
 %
 
3.26
 %
 
3.13
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense

$1,384

 

$1,390

 

$1,417

 

$1,520

 

$1,391

 

$4,191

 

$4,243

Total revenue
2,294


2,317


2,237


2,267


2,276


6,848


6,719

Efficiency ratio 4
60.34
%

59.98
%

63.35
%

67.03
%

61.12
%

61.20
%

63.16
%
Impact of FTE adjustment
(0.58
)
 
(0.57
)
 
(0.58
)
 
(1.09
)
 
(0.98
)
 
(0.58
)
 
(0.99
)
Efficiency ratio-FTE 2, 4
59.76

 
59.41

 
62.77

 
65.94

 
60.14

 
60.62


62.17

Impact of excluding amortization related to intangible assets and certain tax credits
(0.82
)
 
(0.72
)
 
(0.66
)
 
(1.10
)
 
(0.93
)
 
(0.73
)

(0.73
)
Tangible efficiency ratio-FTE 2, 5
58.94
%
 
58.69
%
 
62.11
%
 
64.84
%
 
59.21
%
 
59.89
%

61.44
%
Impact of excluding Form 8-K and other tax reform-related items

 

 

 
(4.99
)
 

 

 

Adjusted tangible efficiency ratio-FTE 2, 5, 6
58.94
%
 
58.69
%
 
62.11
%
 
59.85
%
 
59.21
%
 
59.89
%
 
61.44
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Certain amounts in this schedule are presented net of applicable income taxes, calculated based on each subsidiary’s federal and state tax rates and are adjusted for any permanent differences.
2 The Company presents Net interest income-FTE, Total revenue-FTE, Net interest margin-FTE, Efficiency ratio-FTE, Tangible efficiency ratio-FTE, and Adjusted tangible efficiency ratio-FTE 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 using a federal tax rate of 21% for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018, as well as state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis. 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-FTE plus Noninterest income.
3 The Company presents Return on average tangible common shareholders' equity, which removes the after-tax impact of purchase accounting intangible assets from average common shareholders' equity and removes related intangible asset amortization from Net income available to common shareholders. The Company believes this measure is useful to investors because, by removing the amount of intangible assets and related pre-tax amortization expense (the level of which may vary from company to company), it allows investors to more easily compare the Company’s return on average common shareholders' equity to other companies in the industry. The Company also believes that removing these items provides a more relevant measure of the return on the Company's common shareholders' equity. This measure is utilized by management to assess the profitability of the Company.
4 Efficiency ratio is computed by dividing Noninterest expense by Total revenue. Efficiency ratio-FTE is computed by dividing Noninterest expense by Total revenue-FTE.
5 The Company presents Tangible efficiency ratio-FTE and Adjusted tangible efficiency ratio-FTE, which remove the amortization related to intangible assets and certain tax credits from the calculation of Efficiency ratio-FTE. The Company believes these measures are 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. These measures are utilized by management to assess the efficiency of the Company and its lines of business.
6 The Company presents Adjusted tangible efficiency ratio-FTE, which removes the pre-tax impact of Form 8-K and other tax reform-related items from the calculation of Tangible efficiency ratio-FTE. The Company believes this measure is useful to investors because it is more reflective of normalized operations as it reflects results that are primarily client relationship and client transaction driven. Removing these items also allows investors to more easily compare the Company's tangible efficiency to other companies in the industry that may not have had similar items impacting their results. Additional detail on these items can be found in the Form 8-K furnished with the SEC on January 19, 2018.

22



SunTrust Banks, Inc. and Subsidiaries
APPENDIX A TO THE EARNINGS RELEASE - RECONCILEMENT OF NON-U.S. GAAP MEASURES, continued 1
 
 
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
(Dollars in millions, except per share data) (Unaudited)
2018
 
2018
 
2018
 
2017
 
2017
Total shareholders' equity

$24,139

 

$24,316

 

$24,269

 

$25,154

 

$24,522

Goodwill, net of deferred taxes of $160 million, $159 million, $159 million, $163 million, and $254 million, respectively
(6,171
)
 
(6,172
)
 
(6,172
)
 
(6,168
)
 
(6,084
)
Other intangible assets (including residential MSRs and other servicing rights)
(2,140
)
 
(2,036
)
 
(1,996
)
 
(1,791
)
 
(1,706
)
Residential MSRs and other servicing rights
2,126

 
2,022

 
1,981

 
1,776

 
1,690

Tangible equity 2
17,954

 
18,130

 
18,082

 
18,971

 
18,422

Noncontrolling interest
(101
)
 
(103
)
 
(101
)
 
(103
)
 
(101
)
Preferred stock
(2,025
)
 
(2,025
)
 
(2,025
)
 
(2,475
)
 
(1,975
)
Tangible common equity 2

$15,828

 

$16,002

 

$15,956

 

$16,393

 

$16,346

 
 
 
 
 
 
 
 
 
 
Total assets

$211,276

 

$207,505

 

$204,885

 

$205,962

 

$208,252

Goodwill
(6,331
)
 
(6,331
)
 
(6,331
)
 
(6,331
)
 
(6,338
)
Other intangible assets (including residential MSRs and other servicing rights)
(2,140
)
 
(2,036
)
 
(1,996
)
 
(1,791
)
 
(1,706
)
Residential MSRs and other servicing rights
2,126

 
2,022

 
1,981

 
1,776

 
1,690

Tangible assets

$204,931

 

$201,160

 

$198,539

 

$199,616

 

$201,898

Tangible equity to tangible assets 2
8.76
%
 
9.01
%
 
9.11
%
 
9.50
%
 
9.12
%
Tangible common equity to tangible assets 2
7.72


7.96


8.04


8.21


8.10

Tangible book value per common share 3

$34.51

 

$34.40

 

$33.97

 

$34.82

 

$34.34

 
 
 
 
 
 
 
 
 
 
1 Certain amounts in this schedule are presented net of applicable income taxes, calculated based on each subsidiary’s federal and state tax rates and are adjusted for any permanent differences.
2 The Company presents certain capital information on a tangible basis, including Tangible equity, Tangible common equity, the ratio of Tangible equity to tangible assets, and the ratio of Tangible common equity to tangible assets, which remove the after-tax impact of purchase accounting intangible assets from shareholders' equity. The Company believes these measures are useful to investors because, by removing the amount 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. These measures are used by management to analyze capital adequacy.
3 The Company presents Tangible book value per common share, which excludes the after-tax impact of purchase accounting intangible assets and also excludes Noncontrolling interest and Preferred stock from shareholders' equity. The Company believes this measure is useful to investors because, by removing the amount of intangible assets, noncontrolling interest, and preferred stock (the levels of which may vary from company to company), it allows investors to more easily compare the Company’s book value of common stock to other companies in the industry.
 



23



SunTrust Banks, Inc. and Subsidiaries
CONSUMER BUSINESS SEGMENT
 
Three Months Ended September 30
 
 
 
Nine Months Ended September 30
 
 
(Dollars in millions) (Unaudited)
2018
 
 2017 1
 
% Change
 
2018
 
 2017 1
 
% Change
Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$1,079

 

$999

 
8
 %
 

$3,144

 

$2,915

 
8
 %
FTE adjustment

 

 

 

 

 

Net interest income-FTE 2
1,079

 
999

 
8

 
3,144

 
2,915

 
8

Provision for credit losses 3
36

 
140

 
(74
)
 
101

 
310

 
(67
)
Net interest income-FTE - after provision for credit losses 2
1,043

 
859

 
21

 
3,043

 
2,605

 
17

Noninterest income before net securities gains/(losses)
445

 
482

 
(8
)
 
1,349

 
1,427

 
(5
)
Net securities gains/(losses)

 

 

 

 

 

Total noninterest income
445

 
482

 
(8
)
 
1,349

 
1,427

 
(5
)
Noninterest expense before amortization
994

 
925

 
7

 
2,994

 
2,936

 
2

Amortization

 
2

 
(100
)
 
1

 
3

 
(67
)
Total noninterest expense
994

 
927

 
7

 
2,995

 
2,939

 
2

Income-FTE - before provision for income taxes 2
494

 
414

 
19

 
1,397

 
1,093

 
28

Provision for income taxes
113

 
150

 
(25
)
 
316

 
395

 
(20
)
Tax credit adjustment

 

 

 

 

 

FTE adjustment

 

 

 

 

 

Net income including income attributable to noncontrolling interest
381

 
264

 
44

 
1,081

 
698

 
55

Less: Net income attributable to noncontrolling interest

 

 

 

 

 

Net income

$381

 

$264

 
44
 %
 

$1,081

 

$698

 
55
 %
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue

$1,524

 

$1,481

 
3
 %
 

$4,493

 

$4,342

 
3
 %
Total revenue-FTE 2
1,524

 
1,481

 
3

 
4,493

 
4,342

 
3

 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
 
 
Total LHFI

$75,414

 

$74,742

 
1
 %
 

$75,122

 

$73,613

 
2
 %
Goodwill
4,390

 
4,262

 
3

 
4,348

 
4,262

 
2

Other intangible assets excluding residential MSRs
2

 
7

 
(71
)
 
3

 
8

 
(63
)
Total assets
86,112

 
84,345

 
2

 
85,124

 
83,310

 
2

Consumer and commercial deposits
111,930

 
109,774

 
2

 
111,025

 
109,301

 
2

 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
65.25
 %
 
62.64
 %
 
 
 
66.64
 %
 
67.67
 %
 
 
Impact of FTE adjustment

 

 
 
 

 

 
 
Efficiency ratio-FTE 2
65.25

 
62.64

 
 
 
66.64

 
67.67

 
 
Impact of excluding amortization and associated funding cost of intangible assets
(1.13
)
 
(1.11
)
 
 
 
(1.12
)
 
(1.11
)
 
 
Tangible efficiency ratio-FTE 2, 4
64.12
 %
 
61.53
 %
 
 
 
65.52
 %
 
66.56
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
During the second quarter of 2018, certain of the Company's business banking clients were transferred from the Wholesale business segment to the Consumer business segment. For all periods prior to the second quarter of 2018, the corresponding financial results have been transferred to the Consumer business segment for comparability purposes.
2 
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.
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 commitment reserve balances.
4 
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.

24



SunTrust Banks, Inc. and Subsidiaries
CONSUMER BUSINESS SEGMENT, continued
 
Three Months Ended September 30
 
 
 
Nine Months Ended September 30
 
 
(Dollars in millions) (Unaudited)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Residential Mortgage Production Data:
 
 
 
 
 
 
 
 
 
 
 
Channel mix:
 
 
 
 
 
 
 
 
 
 
 
Retail

$1,860

 

$2,438

 
(24
)%
 

$5,853

 

$7,422

 
(21
)%
Correspondent
4,281

 
3,715

 
15

 
11,691

 
10,647

 
10

Total production

$6,141

 

$6,153

 
 %
 

$17,544

 

$18,069

 
(3
)%
Channel mix - percent:
 
 
 
 
 
 
 
 
 
 
 
Retail
30
%
 
40
%
 
 
 
33
%
 
41
%
 
 
Correspondent
70

 
60

 
 
 
67

 
59

 
 
Total production
100
%
 
100
%
 
 
 
100
%
 
100
%
 
 
Purchase and refinance mix:
 
 
 
 
 
 
 
 
 
 
 
Refinance

$1,202

 

$1,980

 
(39
)%
 

$4,303

 

$6,473

 
(34
)%
Purchase
4,939

 
4,173

 
18

 
13,241

 
11,596

 
14

Total production

$6,141

 

$6,153

 
 %
 

$17,544

 

$18,069

 
(3
)%
Purchase and refinance mix - percent:
 
 
 
 
 
 
 
 
 
 
 
Refinance
20
%
 
32
%
 
 
 
25
%
 
36
%
 
 
Purchase
80

 
68

 
 
 
75

 
64

 
 
Total production
100
%
 
100
%
 
 
 
100
%
 
100
%
 
 
Applications

$7,588

 

$7,658

 
(1
)%
 

$22,915

 

$23,675

 
(3
)%
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage Servicing Data (End of Period):
 
 
 
 
 
 
 
 
 
 
 
Total unpaid principal balance ("UPB") of residential mortgages serviced
 
 
 
 
 
 

$170,480

 

$165,273

 
3
 %
Total UPB of residential mortgages serviced for others
 
 
 
 
 
 
139,955

 
135,411

 
3

Net carrying value of residential MSRs
 
 
 
 
 
 
2,062

 
1,628

 
27

Ratio of net carrying value of residential MSRs to total UPB of residential mortgages serviced for others
 
 
 
 
 
 
1.473
%
 
1.202
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets Under Administration (End of Period):
 
 
 
 
 
 
 
 
 
 
 
Trust and institutional managed assets
 
 
 
 
 
 

$44,647

 

$42,266

 
6
 %
Retail brokerage managed assets
 
 
 
 
 
 
17,516

 
15,561

 
13

Total managed assets
 
 
 
 
 
 
62,163

 
57,827

 
7

Non-managed assets
 
 
 
 
 
 
98,698

 
97,491

 
1

Total assets under advisement
 
 
 
 
 
 

$160,861

 

$155,318

 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 



25



SunTrust Banks, Inc. and Subsidiaries
WHOLESALE BUSINESS SEGMENT
 
Three Months Ended September 30
 
 
 
Nine Months Ended September 30
 
 
(Dollars in millions) (Unaudited)
2018

 2017 1, 2
 
% Change 6
 
2018
 
 2017 1, 2
 
% Change
Statements of Income:



 
 
 

 

 
 
Net interest income

$550



$511

 
8
 %
 

$1,605

 

$1,490

 
8
 %
FTE adjustment
22


36

 
(39
)
 
63

 
105

 
(40
)
Net interest income-FTE 3
572


547

 
5

 
1,668

 
1,595

 
5

Provision/(benefit) for credit losses 4
25


(19
)
 
NM

 
19

 
19

 

Net interest income-FTE - after provision/(benefit) for credit losses 3
547


566

 
(3
)
 
1,649

 
1,576

 
5

Noninterest income before net securities gains/(losses)
373


397

 
(6
)
 
1,124

 
1,169

 
(4
)
Net securities gains/(losses)



 

 

 

 

Total noninterest income
373


397

 
(6
)
 
1,124

 
1,169

 
(4
)
Noninterest expense before amortization
414


402

 
3

 
1,257

 
1,238

 
2

Amortization
19


19

 

 
50

 
46

 
9

Total noninterest expense
433


421

 
3

 
1,307

 
1,284

 
2

Income-FTE - before provision for income taxes 3
487


542

 
(10
)
 
1,466

 
1,461

 

Provision for income taxes
52


118

 
(56
)
 
183

 
318

 
(42
)
Tax credit adjustment
41

 
47

 
(13
)
 
100

 
121

 
(17
)
FTE adjustment
22


36

 
(39
)
 
63

 
105

 
(40
)
Net income including income attributable to noncontrolling interest
372


341

 
9

 
1,120

 
917

 
22

Less: Net income attributable to noncontrolling interest



 

 

 

 

Net income

$372



$341

 
9
 %
 

$1,120

 

$917

 
22
 %
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue

$923

 

$908

 
2
 %
 

$2,729

 

$2,659

 
3
 %
Total revenue-FTE 3
945


944

 

 
2,792

 
2,764

 
1

 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
 
 
Total LHFI

$70,485



$68,568

 
3
 %
 

$69,155

 

$69,303

 
 %
Goodwill
1,941


2,076

 
(7
)
 
1,983

 
2,076

 
(4
)
Other intangible assets excluding residential MSRs
75


74

 
1

 
76

 
75

 
1

Total assets
84,766


82,573

 
3

 
83,001

 
82,916

 

Consumer and commercial deposits
47,773


49,515

 
(4
)
 
48,259

 
49,724

 
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
46.90
 %
 
46.33
 %
 
 
 
47.88
 %
 
48.29
 %
 
 
Impact of FTE adjustment
(1.08
)
 
(1.78
)
 
 
 
(1.08
)
 
(1.84
)
 
 
Efficiency ratio-FTE 3
45.82

 
44.55

 
 
 
46.80

 
46.45

 
 
Impact of excluding amortization and associated funding cost of intangible assets
(2.55
)
 
(2.55
)
 
 
 
(2.37
)
 
(2.21
)
 
 
Tangible efficiency ratio-FTE 3, 5
43.27
 %
 
42.00
 %
 
 
 
44.43
 %
 
44.24
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
During the second quarter of 2018, certain of the Company's business banking clients were transferred from the Wholesale business segment to the Consumer business segment. For all periods prior to the second quarter of 2018, the corresponding financial results have been transferred to the Consumer business segment for comparability purposes.
2 
During the fourth quarter of 2017, the Company sold Premium Assignment Corporation ("PAC"), its commercial lines insurance premium finance subsidiary, the results of which were previously reported within the Wholesale business segment. For all periods prior to January 1, 2018, PAC's financial results, including the gain on sale, have been transferred to Corporate Other for enhanced comparability of the Wholesale business segment excluding PAC.
3 
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.
4 
Provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision/(benefit) attributable to quarterly changes in the Allowance for loan and lease losses and Unfunded commitment reserve balances.
5 
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.
6 
“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

26



SunTrust Banks, Inc. and Subsidiaries
TOTAL CORPORATE OTHER (including Reconciling Items)
 
Three Months Ended September 30
 
 
 
Nine Months Ended September 30
 
 
(Dollars in millions) (Unaudited)
2018

 2017 1
 
 % Change 5
 
2018
 
 2017 1
 
 % Change 5
Statements of Income:



 
 
 
 
 
 
 
 
Net interest income/(expense) 2

($117
)


($80
)
 
(46
)%
 

($309
)
 

($206
)
 
(50
)%
FTE adjustment


1

 
(100
)
 
2

 
2

 

Net interest income/(expense)-FTE 3
(117
)

(79
)
 
(48
)
 
(307
)
 
(204
)
 
(50
)
Provision/(benefit) for credit losses 4


(1
)
 
100

 
1

 
1

 

Net interest income/(expense)-FTE - after provision/(benefit) for credit losses 3
(117
)

(78
)
 
(50
)
 
(308
)
 
(205
)
 
(50
)
Noninterest income/(expense) before net securities gains/(losses)
(36
)

(33
)
 
(9
)
 
(66
)
 
(77
)
 
14

Net securities gains/(losses)



 

 
1

 
1

 

Total noninterest income/(expense)
(36
)

(33
)
 
(9
)
 
(65
)
 
(76
)
 
14

Noninterest expense/(income) before amortization
(43
)

42

 
NM

 
(111
)
 
20

 
NM

Amortization


1

 
(100
)
 

 

 

Total noninterest expense/(income)
(43
)

43

 
NM

 
(111
)
 
20

 
NM

Income/(loss)-FTE - before provision/(benefit) for income taxes 3
(110
)

(154
)
 
29

 
(262
)
 
(301
)
 
13

Provision/(benefit) for income taxes
(70
)

(43
)
 
(63
)
 
(87
)
 
(107
)
 
19

Tax credit adjustment
(41
)
 
(47
)
 
13

 
(100
)
 
(121
)
 
17

FTE adjustment


1

 
(100
)
 
2

 
2

 

Net income/(loss) including income attributable to noncontrolling interest
1


(65
)
 
NM

 
(77
)
 
(75
)
 
(3
)
Less: Net income attributable to noncontrolling interest
2


2

 

 
7

 
7

 

Net income/(loss)

($1
)


($67
)
 
99

 

($84
)
 

($82
)
 
(2
)%
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue

($153
)
 

($113
)
 
(35
)
 

($374
)
 

($282
)
 
(33
)%
Total revenue-FTE 3
(153
)

(112
)
 
(37
)
 
(372
)
 
(280
)
 
(33
)
 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
 
 
Total LHFI

$96



$1,396

 
(93
)%
 

$91

 

$1,360

 
(93
)%
Securities available for sale
31,541


30,579

 
3

 
31,530

 
30,400

 
4

Goodwill



 

 

 

 

Other intangible assets excluding residential MSRs
1



 

 

 

 

Total assets
36,517


38,820

 
(6
)
 
37,245

 
38,607

 
(4
)
Consumer and commercial deposits
(355
)

130

 
NM

 
(125
)
 
120

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
Other Information (End of Period):
 
 
 
 
 
 
 
 
 
 
 
Duration of securities available for sale portfolio (in years)
 
 
 
 
 
 
4.8

 
4.4

 
 
Net interest income interest rate sensitivity:
 
 
 
 
 
 
 
 
 
 
 
% Change in net interest income under:
 
 
 
 
 
 
 
 
 
 
 
Instantaneous 200 basis point increase in rates over next 12 months
 
 
 
 
 
2.0
 %
 
3.2
 %
 
 
Instantaneous 100 basis point increase in rates over next 12 months
 
 
 
 
 
1.1
 %
 
1.8
 %
 
 
Instantaneous 50 basis point decrease in rates over next 12 months
 
 
 
 
 
(0.8
)%
 
(1.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
During the fourth quarter of 2017, the Company sold Premium Assignment Corporation ("PAC"), its commercial lines insurance premium finance subsidiary, the results of which were previously reported within the Wholesale business segment. For all periods prior to January 1, 2018, PAC's financial results, including the gain on sale, have been transferred to Corporate Other for enhanced comparability of the Wholesale business segment excluding PAC.
2 
Net interest income/(expense) is driven by matched funds transfer pricing applied for segment reporting and actual Net interest income.
3 
Net interest income/(expense)-FTE, Income/(loss)-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.
4 
Provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision/(benefit) attributable to quarterly changes in the Allowance for loan and lease losses and Unfunded commitments reserve balances.
5 
“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

27



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED SEGMENT TOTALS
 
Three Months Ended September 30
 
 
 
Nine Months Ended September 30
 
 
(Dollars in millions) (Unaudited)
2018
 
2017
 
% Change
 
2018
 
2017
 
 % Change
Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Net interest income

$1,512

 

$1,430

 
6
 %
 

$4,440

 

$4,199

 
6
 %
FTE adjustment
22

 
37

 
(41
)
 
65

 
107

 
(39
)
Net interest income-FTE 1
1,534

 
1,467

 
5

 
4,505

 
4,306

 
5

Provision for credit losses
61

 
120

 
(49
)
 
121

 
330

 
(63
)
Net interest income-FTE - after provision for credit losses 1
1,473

 
1,347

 
9

 
4,384

 
3,976

 
10

Noninterest income before net securities gains
782

 
846

 
(8
)
 
2,407

 
2,519

 
(4
)
Net securities gains

 

 

 
1

 
1

 

Total noninterest income
782

 
846

 
(8
)
 
2,408

 
2,520

 
(4
)
Noninterest expense before amortization
1,365

 
1,369

 

 
4,140

 
4,194

 
(1
)
Amortization
19

 
22

 
(14
)
 
51

 
49

 
4

Total noninterest expense
1,384

 
1,391

 
(1
)
 
4,191

 
4,243

 
(1
)
Income-FTE - before provision for income taxes 1
871

 
802

 
9

 
2,601

 
2,253

 
15

Provision for income taxes
95

 
225

 
(58
)
 
412

 
606

 
(32
)
Tax credit adjustment

 

 

 

 

 

FTE adjustment
22

 
37

 
(41
)
 
65

 
107

 
(39
)
Net income including income attributable to noncontrolling interest
754

 
540

 
40

 
2,124

 
1,540

 
38

Less: Net income attributable to noncontrolling interest
2

 
2

 

 
7

 
7

 

Net income

$752

 

$538

 
40
 %
 

$2,117

 

$1,533

 
38
 %
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue

$2,294

 

$2,276

 
1
 %
 

$6,848

 

$6,719

 
2
 %
Total revenue-FTE 1
2,316

 
2,313

 

 
6,913

 
6,826

 
1

 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
 
 
Total LHFI

$145,995

 

$144,706

 
1
 %
 

$144,368

 

$144,276

 
 %
Goodwill
6,331

 
6,338

 

 
6,331

 
6,338

 

Other intangible assets excluding residential MSRs
78

 
81

 
(4
)
 
79

 
83

 
(5
)
Total assets
207,395

 
205,738

 
1

 
205,370

 
204,833

 

Consumer and commercial deposits
159,348

 
159,419

 

 
159,159

 
159,145

 

 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
60.34
 %
 
61.12
 %
 
 
 
61.20
 %
 
63.16
 %
 
 
Impact of FTE adjustment
(0.58
)
 
(0.98
)
 
 
 
(0.58
)
 
(0.99
)
 
 
Efficiency ratio-FTE 1
59.76

 
60.14

 
 
 
60.62

 
62.17

 
 
Impact of excluding amortization and associated funding cost of intangible assets
(0.82
)
 
(0.93
)
 
 
 
(0.73
)
 
(0.73
)
 
 
Tangible efficiency ratio-FTE 1
58.94
 %
 
59.21
 %
 
 
 
59.89
 %
 
61.44
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures.

28