-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sa2TjDcaFp2kd64wLYwp0iOfzHOuGEPmgTA4CywWFvXmOag5M6o18YDT4H12hDcw Oe7ZwUkoyHrmKpj0la4AlQ== 0000750556-97-000007.txt : 19971117 0000750556-97-000007.hdr.sgml : 19971117 ACCESSION NUMBER: 0000750556-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNTRUST BANKS INC CENTRAL INDEX KEY: 0000750556 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 581575035 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08918 FILM NUMBER: 97720317 BUSINESS ADDRESS: STREET 1: 303 PEACHTREE STREET NE CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045887711 MAIL ADDRESS: STREET 1: 303 PEACHTREE STREET NE CITY: ATLANTA STATE: GA ZIP: 30308 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 1997 Commission File Number 1-8918 SUNTRUST BANKS, INC. (Exact name of registrant as specified in its charter) Georgia 58-1575035 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 303 Peachtree Street, N.E., Atlanta, Georgia 30308 (Address of principal executive offices) (Zip Code) (404) 588-7711 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ At October 31, 1997, 210,860,396 shares of the Registrant's Common Stock, $1.00 par value were outstanding. Page 1 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Statement Description Page No. Consolidated Statements of Income Nine months ended September 30, 1997 and 1996 3 Consolidated Balance Sheets September 30, 1997, December 31, 1996 and September 30, 1996 4 Consolidated Statements of Cash Flow Nine months ended September 30, 1997 and 1996 5 Consolidated Statements of Shareholders' Equity Nine months ended September 30, 1997 and 1996 6 The above mentioned financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and accordingly do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the full year 1997. Fully diluted per common share data have not been presented because there were no material differences between such amounts and the per common share data as presented. Earnings per common share were based on the weighted average common equivalent shares outstanding for the periods presented. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations MD&A of the Registrant is included on pages 9 through 20. Page 2 CONSOLIDATED STATEMENTS OF INCOME
Three Months Nine Months Ended September 30 Ended September 30 (Dollars in thousands except per share data) 1997 1996 1997 1996 Interest Income Interest and fees on loans $ 775,471 $ 675,845 $ 2,239,149 $ 1,980,203 Interest and dividends on investment securities Taxable interest 119,478 115,108 344,447 331,496 Tax-exempt interest 9,967 11,148 30,895 35,188 Dividends (1) 9,379 7,927 27,955 24,256 Interest on funds sold 16,511 9,128 43,766 25,007 Interest on deposits in other banks 211 285 628 846 Other interest 3,850 917 9,551 2,400 Total interest income 934,867 820,358 2,696,391 2,399,396 Interest Expense Interest on deposits 295,893 273,788 862,791 811,616 Interest on funds purchased 87,019 60,778 242,464 171,195 Interest on other short-term borrowings 27,650 9,327 70,965 36,003 Interest on long-term debt 47,577 22,076 111,208 58,737 Total interest expense 458,139 365,969 1,287,428 1,077,551 Net Interest Income 476,728 454,389 1,408,963 1,321,845 Provision for loan losses 29,003 29,933 84,439 81,155 Net interest income after provision for loan losses 447,725 424,456 1,324,524 1,240,690 Noninterest Income Trust income 79,087 68,170 236,149 209,320 Service charges on deposit accounts 62,327 57,929 183,959 171,745 Other charges and fees 56,342 42,259 161,005 126,727 Credit card fees 17,515 15,720 54,704 49,298 Securities gains (losses) 61 (500) 1,090 14,593 Other noninterest income 17,603 13,720 49,931 39,365 Total noninterest income 232,935 197,298 686,838 611,048 Noninterest Expense Salaries and other compensation 214,430 194,647 622,579 563,767 Employee benefits 27,506 25,999 89,364 81,757 Net occupancy expense 30,896 34,897 95,854 103,034 Equipment expense 30,651 29,526 91,089 85,022 Operating supplies 8,673 8,938 27,355 28,523 Marketing and community relations 15,924 19,227 49,576 53,087 Postage and delivery 10,093 10,490 31,886 30,143 Outside processing and software 17,996 14,126 49,038 38,656 Other noninterest expense 68,179 51,793 194,956 200,048 Total noninterest expense 424,348 389,643 1,251,697 1,184,037 Income before income taxes 256,312 232,111 759,665 667,701 Provision for income taxes 87,734 76,523 264,595 209,597 Net Income $ 168,578 $ 155,588 $ 495,070 $ 458,104 Average common equivalent shares 211,670,768 222,682,956 214,465,799 224,038,986 Net income per average common share $ 0.80 $ 0.70 $ 2.31 $ 2.04 Dividends declared per common share 0.23 0.20 0.68 0.60 (1) Includes dividends on common stock of The Coca-Cola Company 6,757 6,033 20,272 18,100 See notes to consolidated financial statements
Page 3 CONSOLIDATED BALANCE SHEETS
September 30 December 31 September 30 (Dollars in thousands) 1997 1996 1996 Assets Cash and due from banks $ 2,638,422 $ 3,037,309 $ 2,460,275 Interest-bearing deposits in other banks 9,969 13,461 12,700 Trading account 213,774 80,377 164,363 Investment securities (1) 11,346,407 10,551,166 10,759,252 Funds sold 847,025 1,721,845 768,427 Loans 38,475,470 35,404,171 33,824,308 Reserve for loan losses (747,077) (725,849) (724,677) Net loans 37,728,393 34,678,322 33,099,631 Premises and equipment 953,567 768,266 753,664 Intangible assets 285,765 277,736 280,264 Customers' acceptance liability 501,325 507,554 441,584 Other assets 929,544 832,213 892,532 Total assets $ 55,454,191 $ 52,468,249 $ 49,632,692 Liabilities Noninterest-bearing deposits $ 7,840,994 $ 8,900,260 $ 7,940,714 Interest-bearing deposits 28,376,060 27,990,129 27,033,446 Total deposits 36,217,054 36,890,389 34,974,160 Funds purchased 6,595,386 6,047,692 5,346,619 Other short-term borrowings 1,839,091 867,961 878,118 Long-term debt 3,026,245 1,565,341 1,563,906 Acceptances outstanding 501,325 507,554 441,584 Other liabilities 2,286,034 1,709,332 1,649,592 Total liabilities 50,465,135 47,588,269 44,853,979 Shareholders' Equity Preferred stock, no par value; 50,000,000 shares authorized; none issued Common stock, $1.00 par value; 350,000,000 shares authorized (2) 216,608 225,608 225,608 Additional paid in capital 299,519 310,612 313,584 Retained earnings 2,911,637 2,972,900 2,864,131 Treasury stock and other (3) (316,591) (230,918) (131,799) Realized shareholders' equity 3,111,173 3,278,202 3,271,524 Unrealized gains (losses) on investment securities, net of taxes 1,877,883 1,601,778 1,507,189 Total shareholders' equity 4,989,056 4,879,980 4,778,713 Total liabilities and shareholders' equity $ 55,454,191 $ 52,468,249 $ 49,632,692 (1) Includes unrealized gains (losses) on investment securities $ 3,035,624 $ 2,588,907 $ 2,435,138 (2) Common shares outstanding 211,105,817 220,469,001 222,967,776 (3) Treasury shares of common stock 5,502,240 5,139,056 2,640,281 See notes to consolidated financial statements.
Page 4 CONSOLIDATED STATEMENTS OF CASH FLOW
Nine Months Ended September 30 (In thousands) 1997 1996 Cash flow from operating activities: Net income $ 495,070 $ 458,104 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 112,421 95,741 Provision for loan losses 84,439 81,155 Provision for losses on other real estate 1,964 2,974 Amortization of compensation element of restricted stock 7,099 7,372 Securities (gains) and losses, net (1,090) (14,593) (Gains) and losses on sale of equipment, other real estate and repossessed assets, net (18,676) (6,372) Recognition of unearned loan income (180,385) (151,780) Change in period-end balances of: Trading account (133,397) (67,750) Interest receivable (41,419) (9,939) Prepaid expenses (45,840) (35,531) Other assets (24,918) 32,152 Taxes payable 56,965 (10,019) Interest payable 21,373 (31,886) Other accrued expenses 336,686 82,290 Net cash provided by operating activities 670,292 431,918 Cash flow from investing activities: Proceeds from maturities of investment securities 943,999 1,363,706 Proceeds from sales of investment securities 526,802 714,355 Purchase of investment securities (1,816,914) (2,573,527) Net (increase) decrease in loans (2,935,826) (2,349,224) Capital expenditures (269,979) (93,233) Proceeds from sale of equipment, other real estate and repossessed assets 11,680 4,495 Net inflow (outflow) from bank acquisitions 122,603 (1,207) Other (22,575) (24,276) Net cash provided(used) by investing activities (3,440,210) (2,958,911) Cash flow from financing activities: Net increase (decrease) in deposits (808,920) 1,712,587 Net increase (decrease) in funds purchased and other short-term borrowings 1,518,824 (156,391) Proceeds from the issuance of long-term debt 1,647,819 661,888 Repayment of long-term debt (186,915) (100,327) Proceeds from the exercise of stock options 5,036 4,409 Payments to acquire treasury stock (539,634) (189,168) Dividends paid (143,491) (134,162) Net cash provided by financing activities 1,492,719 1,798,836 Net decrease in cash and cash equivalents (1,277,199) (728,157) Cash and cash equivalents at beginning of period 4,772,615 3,969,559 Cash and cash equivalents at end of period $ 3,495,416 $ 3,241,402 Supplemental Disclosure Interest paid $ 1,308,801 $ 1,109,437 Taxes paid 208,252 220,130 See notes to consolidated financial statements.
Page 5 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Unrealized Additional Treasury Gains (Losses) Common Paid in Retained Stock and on Securities (In thousands) Stock Capital Earnings Other Net of Taxes Total Balance, January 1, 1996 $ 130,461 $ 434,724 $ 3,417,801 $ (871,953) $ 1,158,548 $ 4,269,581 Stock dividend 113,183 (113,183) - - - - Balance, January 1, 1996, restated 243,644 321,541 3,417,801 (871,953) 1,158,548 4,269,581 Net income - - 458,104 - - 458,104 Cash dividends declared on common stock, $0.60 per share - - (134,150) - - (134,150) Proceeds from exercise of stock options - (10,536) - 14,945 - 4,409 Acquisition of treasury stock - - - (189,168) - (189,168) Retirement of treasury stock (18,036) - (877,624) 895,660 - - Issuance of treasury stock for 401(k) - 1,605 - 6,683 - 8,288 Issuance, net of forfeitures, of treasury stock as restricted stock - 974 - 18,523 - 19,497 Issuance of treasury stock for acquisition - - - 5,636 - 5,636 Compensation element of restricted stock - - - (19,497) - (19,497) Amortization of compensation element of restricted stock - - - 7,372 - 7,372 Change in unrealized gains (losses) on securities, net of taxes - - - - 348,641 348,641 Balance, September 30, 1996 $ 225,608 $ 313,584 $ 2,864,131 $ (131,799) $ 1,507,189 $ 4,778,713 Balance, January 1, 1997 $ 225,608 $ 310,612 $ 2,972,900 $ (230,918) $ 1,601,778 $ 4,879,980 Net income - - 495,070 - - 495,070 Cash dividends declared on common stock, $0.68 per share - - (143,491) - - (143,491) Proceeds from exercise of stock options - (15,815) - 20,851 - 5,036 Acquisition of treasury stock - - - (539,634) - (539,634) Retirement of treasury stock (9,000) - (412,842) 421,842 - - Issuance of treasury stock for 401(k) - 1,378 - 7,513 - 8,890 Issuance, net of forfeitures, of treasury stock as restricted stock - 3,344 - 14,428 - 17,772 Compensation element of restricted stock - - - (17,772) - (17,772) Amortization of compensation element of restricted stock - - - 7,099 - 7,099 Change in unrealized gains (losses) on securities, net of taxes - - - - 276,105 276,105 Balance, September 30, 1997 $ 216,608 $ 299,519 $ 2,911,637 $ (316,591) $ 1,877,883 $ 4,989,056 See notes to consolidated financial statements. * Balance at September 30, 1997 includes $256,454 for Treasury Stock and $60,137 for Deferred Compensation.
Page 6 Notes to Consolidated Financial Statements Note 1 - Accounting Policies The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. These financial statements should be read in conjunction with the Company's annual financial statements and related notes for the year ended December 31, 1996. Note 2 - Stock Dividend On May 21, 1996, the Company paid a stock dividend of one share of SunTrust common stock for each outstanding share of SunTrust common stock to shareholders of record on May 1, 1996. The consolidated financial statements for prior periods have been restated for the effect of this stock dividend. Note 3 - Recent Accounting Developments In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 (SFAS No. 128), Earnings Per Share. SFAS No. 128 establishes standards for computing and presenting earnings per share (EPS) and applies to entities with publicly held common stock. SFAS No. 128 simplifies the standards for computing earnings per share previously found in APB Opinion No. 15 and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the statement of earnings for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. SFAS No. 128 is effective for financial statements issued for periods ending after December 15, 1997, earlier application is not permitted. The pro forma basic and diluted EPS calculated under SFAS No. 128 were not materially different from the primary and fully-diluted earnings per share presented for the periods ended September 30, 1997 and 1996. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, which is effective for annual and interim periods beginning after December 15, 1997. This statement requires that all items that are required to be recognized under accounting standards as comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.131, Disclosures about Segments of an Enterprise and Related Information, which is effective for annual and interim periods beginning after December 15, 1997. This statement establishes standards for the method that public entities use to report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographical areas and major customers. Page 7 Notes to Consolidated Financial Statements - continued Note 4 - Derivative Financial Instruments Derivatives are used to hedge interest rate exposures by modifying the interest rate characteristics of related balance sheet instruments. The specific criteria required for derivatives used for such purposes are described below. Derivatives that do not meet these criteria are carried at market value with changes in value recognized currently in earnings. Currently, it is not the Company's policy to hold derivatives that do not qualify as hedges. Derivatives used as hedges must be effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. Derivatives used for hedging purposes include swaps, forwards, futures, and purchased options. The fair value of derivative contracts are carried off-balance sheet and the unrealized gains and losses on derivative contracts are generally deferred. The interest component associated with derivatives used as hedges or to modify the interest rate characteristics of assets and liabilities is recognized over the life of the contract in net interest income. Upon contract settlement or termination, the cumulative change in the market value of such derivatives is recorded as an adjustment to the carrying value of the underlying asset or liability and recognized in net interest income over the expected remaining life of the related asset or liability. In instances where the underlying instrument is sold, the cumulative change in the value of the associated derivative is recognized immediately in the component of earnings relating to the underlying instrument. Note 5 - Acquisitions On September 26, 1997, the Company signed a definitive agreement to acquire Equitable Securities Corporation, a Nashville, Tennessee-based investment banking, securities brokerage and investment advisory firm. The merger, which is subject to regulatory approval and other customary conditions, is expected to be completed during the first quarter of 1998. Page 8 TABLE 1 - SELECTED QUARTERLY FINANCIAL DATA (Dollars in millions except per share data)
Quarters 1997 1996 3 2 1 4 3 Summary of Operations Interest and dividend income $ 934.9 $ 898.4 $ 863.1 $ 846.5 $ 820.4 Interest expense 458.1 428.7 400.6 384.2 366.0 Net interest income 476.8 469.7 462.5 462.3 454.4 Provision for loan losses 29.0 29.2 26.2 34.7 30.0 Net interest income after provision for loan losses 447.8 440.5 436.3 427.6 424.4 Noninterest income 232.9 228.1 225.8 207.0 197.2 Noninterest expense 424.4 413.3 414.0 399.1 389.6 Income before provision for income taxes 256.3 255.3 248.1 235.5 232.0 Provision for income taxes 87.7 89.9 87.0 77.0 76.4 Net income $ 168.6 $ 165.4 $ 161.1 $ 158.5 $ 155.6 Per common share Net income $ 0.80 $ 0.77 $ 0.74 $ 0.72 $ 0.70 Dividends declared 0.23 0.23 0.23 0.23 0.20 Book value 23.63 24.21 22.31 22.13 21.43 Common stock market price High 70.44 59.00 54.75 52.50 41.50 Low 54.75 44.13 46.13 40.88 34.88 Close 67.94 55.06 46.38 49.25 41.00 Selected Average Balances Total assets $55,060.2 $53,498.3 $51,906.5 $50,061.1 $48,122.6 Earning assets 47,672.1 46,238.1 45,054.0 43,763.9 42,179.2 Loans 37,898.9 37,000.9 35,894.2 34,416.9 33,029.6 Total deposits 36,115.7 36,078.8 35,519.5 34,840.7 34,652.8 Realized shareholders' equity 3,127.6 3,128.2 3,229.2 3,334.0 3,281.7 Total shareholders' equity 5,090.4 5,007.8 4,966.6 4,841.3 4,713.7 Common equivalent shares (thousands) 211,671 213,572 218,227 221,840 222,683 Financial Ratios and Other ROA 1.29 % 1.31 % 1.33 % 1.32 % 1.35 % ROE 21.38 21.21 20.23 18.91 18.86 Net interest margin 4.04 4.16 4.25 4.29 4.38 Net interest income - taxable-equivalent $ 485.7 $ 479.2 $ 472.0 $ 472.2 $ 464.2 ROA, ROE and net interest margin are calculated excluding unrealized gains on investment securities because the unrealized gains are not included in income.
Page 9 The following is an analysis of the financial performance of SunTrust Banks, Inc. (SunTrust or Company) for the third quarter of 1997 and provides comments on earlier periods. In this discussion net interest income and net interest margin are presented on a taxable-equivalent basis. Also all ratios are presented on an annualized basis. TABLE 2A - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE YIELDS EARNED AND RATES PAID (Dollars in millions; yields on a taxable-equivalent basis)
Quarter Ended September 30, 1997 June 30, 1997 September 30, 1996 Average Income/ Yields/ Average Income/ Yields/ Average Income/ Yields/ Balances Expense Rates Balances Expense Rates Balances Expense Rates Assets Loans Taxable $37,205.4 $766.1 8.17 % $36,296.5 $738.0 8.16 % $32,389.3 $666.9 8.19 % Tax-exempt 693.5 13.5 7.75 704.4 14.0 7.95 640.3 13.4 8.28 Total loans 37,898.9 779.6 8.16 37,000.9 752.0 8.15 33,029.6 680.3 8.19 Investment securities: Taxable 7,679.8 128.8 6.66 7,412.5 123.7 6.69 7,648.4 123.1 6.41 Tax-exempt 689.3 14.7 8.46 708.5 15.1 8.57 747.2 16.5 8.76 Total investment securities 8,369.1 143.5 6.80 8,121.0 138.8 6.85 8,395.6 139.6 6.62 Funds sold 1,139.9 16.6 5.75 845.5 13.3 6.27 670.3 9.1 5.42 Other short-term investments 264.2 4.1 6.18 270.7 3.8 5.69 83.7 1.2 5.80 Total earning assets 47,672.1 943.8 7.85 46,238.1 907.9 7.88 42,179.2 830.2 7.83 Reserve for loan losses (741.6) (733.5) (723.1) Cash and due from banks 2,238.7 2,197.8 2,167.9 Premises and equipment 949.4 945.0 750.6 Other assets 1,766.9 1,813.8 1,435.6 Unrealized gains(losses) on investment securities 3,174.7 3,037.1 2,312.4 Total assets $55,060.2 $53,498.3 $48,122.6 Liabilities and Shareholders' Equity Interest-bearing deposits: NOW/Money market accounts $10,424.8 $ 71.6 2.73 % $10,494.5 $ 71.2 2.72 % $10,270.4 $ 69.8 2.70 % Savings 5,202.2 47.1 3.59 5,297.6 47.4 3.59 5,580.5 49.9 3.56 Consumer time 6,946.6 91.2 5.21 7,016.1 90.6 5.18 7,120.1 91.9 5.13 Other time 6,084.9 86.0 5.61 5,808.1 80.7 5.58 4,579.7 62.3 5.40 Total interest-bearing deposits 28,658.5 295.9 4.10 28,616.3 289.9 4.06 27,550.7 273.9 3.95 Funds purchased 6,440.0 86.9 5.36 5,827.0 77.8 5.35 4,782.0 60.8 5.06 Other short-term borrowings 1,906.4 27.7 5.75 1,762.1 24.9 5.66 658.7 9.3 5.63 Long-term debt 2,826.0 47.6 6.68 2,191.7 36.1 6.61 1,333.0 22.0 6.59 Total interest-bearing liabiliti 39,830.9 458.1 4.56 38,397.1 428.7 4.48 34,324.4 366.0 4.24 Noninterest-bearing deposits 7,457.2 7,462.5 7,102.1 Other liabilities 2,681.7 2,630.9 1,982.4 Realized shareholders' equity 3,127.6 3,128.2 3,281.7 Net unrealized gains(losses) on investment securities 1,962.8 1,879.6 1,432.0 Total liabilities and shareholders' equity $55,060.2 $53,498.3 $48,122.6 Interest rate spread 3.29 % 3.40 % 3.59 % Net Interest Income $485.7 $479.2 $464.2 Net Interest Margin 4.04 % 4.16 % 4.38 % Interest income includes loan fees of $26.5, $24.1, and $24.1 in the quarters ended September 30, and June 30, 1997 and September 30, 1996 and $73.8 and $70.6 in the nine months ended September 30, 1997 and 1996. Nonaccrual loans are included in average balances and income on such loans, if recognized, is recorded on a cash basis. Interest income includes the effects of taxable-equivalent adjustments (reduced by the nondeductible portion of interest expense) using a federal income tax rate of 35%, and, where applicable, state income taxes, to increase tax-exempt interest income to a taxable-equivalent basis. The net taxable-equivalent adjustment amounts included in the above table aggregated $8.9, $9.5 and $9.8 in the quarters ended September 30 and June 30, 1997 and September 30, 1996 and $27.9 and $30.2 in the nine months ended September 30, 1997 and 1996.
Page 10 TABLE 2b - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE YIELDS EARNED AND RATES PAID (Dollars in millions; yields on a taxable-equivalent basis)
Nine Months Ended September 30, 1997 September 30, 1996 Average Income/ Yields/ Average Income/ Yields/ Balances Expense Rates Balances Expense Rates Assets Loans Taxable $36,239.3 $2,211.3 8.16 % $31,616.5 $1,953.7 8.25 % Tax-exempt 699.4 40.9 7.82 630.6 39.8 8.42 Total loans 36,938.7 2,252.2 8.15 32,247.1 1,993.5 8.26 Investment securities: Taxable 7,457.5 372.4 6.68 7,462.1 356.0 6.37 Tax-exempt 709.5 45.5 8.58 780.4 51.9 8.88 Total investment securities 8,167.0 417.9 6.84 8,242.5 407.9 6.61 Funds sold 985.5 43.9 5.94 618.5 25.0 5.40 Other short-term investments 239.8 10.3 5.76 73.9 3.3 5.97 Total earning assets 46,331.0 2,724.3 7.86 41,182.0 2,429.7 7.88 Reserve for loan losses (734.5) (714.6) Cash and due from banks 2,232.0 2,213.3 Premises and equipment 926.8 741.9 Other assets 1,737.2 1,397.8 Unrealized gains(losses) on investment securities 3,007.4 2,112.0 Total assets $53,499.9 $46,932.4 Liabilities and Shareholders' Equity Interest-bearing deposits: NOW/Money market accounts $10,469.4 $ 213.8 2.73 % $10,271.7 $ 215.8 2.81 % Savings 5,300.3 142.3 3.59 5,352.6 147.8 3.69 Consumer time 7,003.9 271.3 5.18 7,356.2 285.8 5.19 Other time 5,682.0 235.4 5.54 3,949.8 162.3 5.49 Total interest-bearing deposits 28,455.6 862.8 4.05 26,930.3 811.7 4.03 Funds purchased 6,126.2 242.4 5.29 4,496.3 171.2 5.09 Other short-term borrowings 1,677.8 71.0 5.66 855.8 36.0 5.62 Long-term debt 2,229.8 111.2 6.67 1,168.1 58.7 6.72 Total interest-bearing liabiliti 38,489.4 1,287.4 4.47 33,450.5 1,077.6 4.30 Noninterest-bearing deposits 7,451.3 7,109.8 Other liabilities 2,537.1 1,824.4 Realized shareholders' equity 3,161.3 3,240.3 Net unrealized gains(losses) on investment securities 1,860.8 1,307.4 Total liabilities and shareholders' equity $53,499.9 $46,932.4 Interest rate spread 3.39 % 3.58 % Net Interest Income $1,436.9 $1,352.1 Net Interest Margin 4.15 % 4.39 % Interest rate swap transactions used to help balance the Company's interest-sensitivity position increased interest expense by $1.2, $0.8, and $0.4 in the quarters ended September 30, 1997, June 30, 1997 and September 30, 1996 and $2.4 and $1.2 in the nine months ended September 30, 1997 and September 30, 1996. Without these swaps, the rate on other time deposits and the net interest margin would have been 5.53% and 4.05%, 5.52% and 4.16%, and 5.37% and 4.38% in the quarters ended September 30 and June 30, 1997 and September 30, 1996 and 5.48% and 4.15%, and 5.45% and 4.39% in the nine months ended September 30, 1997 and 1996.
Page 11 Net Interest Income/Margins. The Company's net interest margin of 4.04% for the third quarter of 1997 was 34 basis points lower than the third quarter of last year. The rate on earning assets was 7.85% in the third quarter of 1997 and 7.83% in the third quarter of 1996. At the same time, the rate on interest-bearing liabilities increased 32 basis points. Rapid earning asset growth funded by growth in higher cost funding sources put downward pressure on the net interest margin. Funds used for the repurchase of SunTrust common stock (see the discussion entitled "Capital" on page 18) also had the effect of lowering the net interest margin by approximately 4 basis points. Interest rate swaps also contributed to the decrease of this year's net interest margin (see the discussion entitled "Derivatives" on page 17). Interest income which the Company was unable to recognize on nonperforming loans in the first nine months of 1997 had a negative impact of 1 basis point on the net interest margin as compared to 2 basis points in the first nine months of 1996. Table 2 contains more detailed information concerning average balances and interest yields earned and rates paid. Noninterest Income. Noninterest income in the third quarter and the first nine months of 1997, adjusted to exclude securities gains (losses), increased 17.7% and 15.0% from the comparable periods a year ago. Trust income, the Company's largest source of noninterest income, increased 16.0% and 12.8% over the same periods. Mortgage fees were 39.3% higher in the third quarter of this year compared to the same period last year due to higher volume in our mortgage banking business. Credit card fees also increased 11.4% and 11.0%. TABLE 3 - NONINTEREST INCOME (In millions)
Quarters 1997 1996 3 2 1 4 3 Trust income $ 79.0 $ 78.7 $ 78.4 $ 69.0 $ 68.1 Service charges on deposit accounts 62.4 61.9 59.7 60.7 57.9 Corporate and institutional investment serv 8.6 4.6 5.0 4.8 3.4 Retail investment income 8.3 8.5 8.0 5.1 6.3 Credit card fees 17.5 18.4 18.8 17.0 15.7 Mortgage fees 12.2 10.9 9.2 8.8 8.7 Other charges and fees 27.2 29.5 29.0 25.9 23.8 Securities gains (losses) 0.1 (0.4) 1.4 (0.4) (0.5) Trading account profits and commissions 4.0 4.8 4.0 4.1 3.5 Other income 13.6 11.2 12.3 12.0 10.3 Total noninterest income $232.9 $228.1 $225.8 $207.0 $197.2
Page 12 Noninterest Expense. Noninterest expense increased 8.9% and 5.7% in the third quarter and first nine months of 1997 compared to the same periods last year. Personnel expense, consisting of salaries, other compensation and employee benefits, increased 9.7% and 10.3% over the aforementioned periods. Other noninterest expense increased substantially over last year due to expenditures made in connection with various projects to stimulate business growth and development. TABLE 4 - NONINTEREST EXPENSE (In millions)
Quarters 1997 1996 3 2 1 4 3 Salaries $175.2 $169.8 $167.0 $165.6 $161.7 Other compensation 39.2 36.0 35.4 34.2 32.9 Employee benefits 27.5 29.5 32.4 28.8 26.0 Net occupancy expense 30.9 32.5 32.5 35.2 34.9 Equipment expense 30.7 30.3 30.1 30.4 29.5 FDIC premiums 1.3 1.4 1.8 1.4 14.1 Marketing and community relations 15.9 16.9 16.8 23.3 19.2 Postage and delivery 10.1 10.5 11.3 10.3 10.5 Operating supplies 8.7 9.1 9.6 9.4 8.9 Other real estate expense (3.1) (1.3) (1.2) (1.1) 0.4 Communications 8.9 8.6 9.1 8.6 8.3 Consulting and legal 8.1 5.4 5.7 8.5 5.8 Amortization of intangible assets 8.3 8.0 7.7 7.3 6.8 Outside processing and software 18.0 16.1 14.9 18.2 14.2 Other expense 62.7 56.6 55.8 37.2 30.6 Total noninterest expense $442.4 $429.4 $428.9 $417.3 $403.8
Provision for Loan Losses. The Company decreased its provision for loan losses in the third quarter of 1997 to $29.0 million from $30.0 million in the same period last year, yet the provision still exceeded net charge-offs by $7.3 million. Net loan charge-offs were $63.1 million in the first nine months of this year, representing 0.23% of average loans. The comparable net charge-off amount for 1996 was $56.5 million or 0.23% of average loans. The Company maintains a reserve for loan losses to absorb possible losses in the loan portfolio. The reserve consists of three elements; (i) reserves established on specific loans, (ii) reserves based on historical loan loss experience, and (iii) reserves based on economic conditions in the Company's individual markets. The specific reserve element is based on a regular analysis of all loans and commitments over a fixed dollar amount where the internal credit rating is at or below a pre-determined classification. The historical loan loss element represents a projection of future credit problems and is determined statistically using a loss migration analysis that examines loss experience and the related internal gradings of loans charged-off. The general economic condition element is determined by management at the individual subsidiary banks and is based on a subjective evaluation of specific economic factors in their markets that might affect the collectibility of loans. SunTrust is committed to the early recognition of possible problems and to a strong, conservative reserve. The Company's reserve for loan losses totaled $747.1 million at September 30, 1997, which was 1.94% of quarter-end loans and 482.0% of total nonperforming loans. These ratios at December 31, 1996 were 2.05% and 342.0% and at September 30, 1996 were 2.14% and 386.2%. Page 13 TABLE 5 - SUMMARY OF LOAN LOSS EXPERIENCE (Dollars in millions)
Quarters 1997 1996 3 2 1 4 3 Reserve for Loan Losses Balances - beginning of quarter $ 739.8 $ 734.5 $ 725.8 $ 724.7 $ 722.6 Reserve of purchased banks Provision for loan losses 29.0 29.2 26.2 34.7 30.0 Charge-offs: Commercial (6.8) (4.7) (4.8) (14.4) (12.2) Real estate: Construction (1.3) (0.5) (0.1) (1.1) (0.2) Mortgage, 1-4 family (2.0) (1.5) (1.1) (1.5) (2.3) Other (1.3) (1.8) (1.4) (3.0) (2.8) Lease financing (0.4) (0.3) (0.3) (0.3) (0.2) Credit card (13.2) (12.5) (11.6) (11.7) (10.6) Other consumer loans (12.4) (14.0) (12.7) (13.9) (12.6) Total charge-offs (37.4) (35.3) (32.0) (45.9) (40.9) Recoveries: Commercial 4.3 2.5 4.6 3.7 4.6 Real estate: Construction 1.0 0.1 0.1 0.1 Mortgage, 1-4 family 0.2 0.4 0.6 0.4 0.3 Other 2.6 1.1 1.3 1.5 1.2 Lease financing 0.2 0.1 0.1 0.1 0.1 Credit card 2.0 1.8 2.4 1.7 1.7 Other consumer loans 5.4 5.5 5.4 4.8 5.0 Total recoveries 15.7 11.4 14.5 12.3 13.0 Net charge-offs (21.7) (23.9) (17.5) (33.6) (27.9) Balance - end of quarter $ 747.1 $ 739.8 $ 734.5 $ 725.8 $ 724.7 Quarter-end loans outstanding: Domestic $38,185.3 $37,382.9 $36,148.1 $35,154.8 $33,567.4 International 290.2 301.4 279.9 249.4 256.9 Total $38,475.5 $37,684.3 $36,428.0 $35,404.2 $33,824.3 Ratio of reserve to quarter-end loans 1.94 % 1.96 % 2.02 % 2.05 % 2.14 % Average loans $37,898.9 $37,000.9 $35,894.2 $34,416.9 $33,029.6 Ratio of net charge-offs (annualized) to average loans 0.23 % 0.26 % 0.20 % 0.39 % 0.34 %
Page 14 TABLE 6 - NONPERFORMING ASSETS (Dollars in millions)
1997 1996 September 30 June 30 March 31 December 31 September 30 Nonperforming Assets Nonaccrual loans: Domestic: Commercial $ 35.2 $ 29.1 $ 36.5 $ 45.6 $ 29.1 Real Estate: Construction 2.8 12.6 13.6 13.3 14.9 Mortgage, 1-4 family 57.8 54.8 59.5 49.6 49.7 Other 47.1 55.0 59.9 81.0 80.1 Lease financing 0.7 1.0 1.3 2.3 0.2 Consumer loans 8.7 8.5 10.2 10.5 10.9 Total nonaccrual loans 152.3 161.0 181.0 202.3 184.9 Restructured loans 2.7 11.0 9.9 9.9 2.7 Total nonperforming loans 155.0 172.0 190.9 212.2 187.6 Other real estate owned 35.7 41.9 43.9 43.6 51.9 Total Nonperforming Assets $190.7 $213.9 $234.8 $255.8 $239.5 Ratios: Nonperforming loans to total loans 0.40 % 0.46 % 0.52 % 0.60 % 0.55 % Nonperforming assets to total loans plus other real estate owned 0.50 0.57 0.64 0.72 0.71 Reserve to nonperforming loans 482.0 430.1 384.7 342.0 386.2 Accruing Loans Past Due 90 Days or More $ 41.4 $ 25.9 $ 33.9 $ 34.2 $ 28.0
Nonperforming Assets. Nonperforming assets consist of nonaccrual and restructured loans and other real estate owned. Nonperforming assets have decreased $65.1 million since December 31, 1996 and $48.8 million since September 30, 1996. Included in nonperforming loans at September 30, 1997 are loans aggregating $23.7 million which are current as to the payment of principal and interest but have been placed in nonperforming status because of uncertainty over the borrowers' ability to make future payments. In management's opinion, all known material potential problem loans are included in Table 6. Interest income on nonaccrual loans, if recognized, is recorded on a cash basis. During the first nine months of 1997, the gross amount of interest income that would have been recorded on nonaccrual loans and restructured loans at September 30, 1997, if all such loans had been accruing interest at the original contractual rate, was $11.0 million. Interest income recognized in the nine months ended September 30, 1997 on all such nonperforming loans at September 30, 1997, was $3.7 million. Page 15 Table 7 - Loan Portfolio by Types of Loans (in millions)
1997 1996 September 30 June 30 March 31 December 31 September 30 Commercial: Domestic $12,968.2 $12,668.3 $12,267.0 $11,725.5 $10,985.2 International 278.0 289.9 268.4 240.6 247.7 Real estate: Construction 1,400.7 1,411.2 1,416.5 1,384.8 1,330.2 Mortgage, 1-4 family 12,726.3 12,326.0 11,839.2 11,508.2 11,018.1 Other 4,766.4 4,751.7 4,656.1 4,585.8 4,547.6 Lease financing 663.6 632.3 607.9 607.5 598.3 Credit card 1,022.5 993.9 904.9 946.8 857.2 Other consumer loans 4,649.8 4,611.0 4,468.0 4,405.0 4,240.0 Total loans $38,475.5 $37,684.3 $36,428.0 $35,404.2 $33,824.3
Loans. During the third quarter and first nine months of 1997, average loans increased 14.7% and 14.6% over the same periods a year ago. Since December 31, 1996, the two loan categories experiencing significant growth were 1-4 family residential mortgage loans (most of which are variable rate loans) and domestic commercial loans. The average loan to deposit ratios were 104.9% and 102.9% in the third quarter and first nine months of 1997 compared with 95.3% and 94.7% in the same periods of 1996. At September 30, 1997, international outstandings, which include loans, acceptances, deposits in other banks, foreign guarantees and accrued interest, totaled $314.1 million, an increase of 14.8% from $273.5 million at December 31, 1996. Income Taxes. The provision for income taxes was $87.7 and $264.6 million in the third quarter and first nine months of 1997 compared to $76.4 and $209.6 million in the same periods last year. Investment Securities. The investment portfolio continues to be managed to maximize yield over an entire interest rate cycle while providing liquidity and minimizing risk. The portfolio yield increased from an average of 6.62% in the third quarter of 1996 to 6.80% in the third quarter of this year. The portfolio size (measured at cost) decreased to $8.1 billion, while the growth in liabilities was used to fund loan growth. The average life of the portfolio was approximately 3.2 years and its duration, the average time to the receipt of the present value of the portfolio's expected cash flow, was 2.2 years at September 30, 1997. At September 30, 1997, approximately 29.4% of the portfolio consisted of U.S. Treasury securities, 6.9% U.S. government agency securities, 47.9% mortgage-backed securities, 8.4% municipal securities, and 7.4% in other securities (calculated as a percent of original cost). All of the Company's holdings in mortgage-backed securities are backed by U.S. government or federal agency guarantees limiting the credit risk associated with the mortgage loans. At September 30, 1997, the carrying value of the securities portfolio was $3.0 billion over its amortized cost; the gain consisting mostly of a $2.9 billion unrealized gain on the Company's investment in common stock of The Coca-Cola Company. Page 16 Liquidity Management. Liquidity is managed to ensure there is sufficient cash flow to satisfy demand for credit, deposit withdrawals and other attractive market opportunities. A large, stable core deposit base, strong capital position and excellent credit ratings are the solid foundation for the Company's liquidity position. It is enhanced by an investment portfolio structured to provide liquidity as needed. Liquidity is also strengthened by ready access to regional and national wholesale funding sources including fed funds purchased, securities sold under agreements to repurchase, negotiable certificates of deposit and offshore deposits, as well as an active bank deposit note program, commercial paper issuance by the Parent Company, and Federal Home Loan Bank (FHLB) advances for several subsidiary banks who are FHLB members. Average total deposits for the third quarter and first nine months of 1997 increased 4.2% and 5.5% over the same periods a year ago. Interest- bearing deposits represented 79.4% and 79.3% of average deposits for the third quarter and first nine months of 1997, compared to 79.5% and 79.1% for the same periods in 1996. In the third quarter of 1997, average net purchased funds (average funds purchased less average funds sold) increased $1.2 billion over the same period in 1996. Net purchased funds were 11.1% of average earning assets for the third quarter and first nine months of 1997 as compared to 9.8% and 9.4% in the same periods a year ago. Derivatives. The Company enters into various derivatives contracts in a dealer capacity for customers and in managing its own interest rate risk. Where contracts have been created for customers, the Company enters into offsetting positions to eliminate its exposure to market risk. The principal derivative contract used by the Company is the interest rate swap. Interest rate swaps are contracts in which a series of interest rate flows, based on a specific notional amount and a fixed and floating interest rate, are exchanged over a prescribed period. The Company also monitors its sensitivity to changes in interest rates and uses interest rate swap contracts to limit the volatility of net interest income. Table 8 details interest rate swaps as of September 30, 1997 used for managing interest rate sensitivity. TABLE 8 - INTEREST RATE SWAPS
Average Average Average (Dollars in millions) Notional Fair Maturity Rate Rate At September 30, 1997 Value Value In Months Paid Received Gain position: Receive fixed $ 654.9 $23.0 93.2 5.77 % 7.03 % Pay fixed 285.6 2.4 51.4 6.37 5.73 Total gain position 940.5 25.4 Loss position: Receive fixed 1,367.7 (6.3) 8.7 5.77 5.41 Pay fixed 441.1 (6.4) 32.2 6.31 5.86 Total loss position 1,808.8 (12.7) Total $2,749.3 $12.7
The majority of the swaps are designated as hedges on deposits and other interest-bearing liabilities. During the nine months ended September 30, 1997, hedge swaps decreased net interest income by $2.4, compared with a $1.2 decrease in the corresponding 1996 period. Page 17 TABLE 9 - CAPITAL RATIOS (Dollars in millions)
1997 1996 September 30 June 30 March 31 December 31 September 30 Tier 1 capital: Realized shareholders' equity $ 3,110.8 $ 3,075.8 $ 3,146.9 $ 3,278.2 $ 3,271.5 Trust preferred securities 600.0 600.0 0.0 0.0 0.0 Intangible assets other than servicing rights (285.8) (275.3) (277.2) (244.1) (249.0) Total Tier 1 capital 3,425.0 3,400.5 2,869.7 3,034.1 3,022.5 Tier 2 capital: Allowable reserve for loan losses 567.1 561.0 526.3 510.8 487.8 Allowable long-term debt 1,055.1 958.2 858.2 877.1 877.9 Total Tier 2 capital 1,622.2 1,519.2 1,384.5 1,387.9 1,365.7 Total capital $ 5,047.2 $ 4,919.7 $ 4,254.2 $ 4,422.0 $ 4,388.2 Risk-weighted assets $45,184.8 $44,703.9 $41,900.0 $40,651.0 $38,788.8 Risk-based ratios: Tier 1 capital 7.58 % 7.60 % 6.84 % 7.46 % 7.78 % Total capital 11.17 11.00 10.15 10.87 11.30 Tier 1 leverage ratio 6.63 6.77 5.89 6.40 6.63 Total shareholders' equity to assets 9.00 9.27 8.96 9.30 9.63
Capital Resources. Consistent with the objective of operating a sound financial organization, SunTrust maintains capital ratios well above regulatory requirements. The rate of internal capital generation has been more than adequate to support asset growth. Table 9 presents capital ratios for the five most recent quarters. Regulatory agencies measure capital adequacy with a framework that makes capital requirements sensitive to the risk profiles of individual banking companies. The guidelines define capital as either Tier 1 (primarily shareholders' equity excluding unrealized gains and losses on investment securities) or Tier 2 (certain debt instruments and a portion of the reserve for loan losses). The Company and its subsidiary banks are subject to a minimum Tier 1 capital to risk-weighted assets ratio of 4% and total capital (Tier 1 plus Tier 2) to risk-weighted assets ratio of 8%. The Federal Reserve Board (Board) has also established an additional capital adequacy guideline referred to as the Tier 1 leverage ratio which measures the ratio of Tier 1 capital to average quarterly assets. The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires the establishment of a capital-based supervisory system of prompt corrective action for all depository institutions. The Board's implementation of FDICIA defines "well capitalized" institutions as those whose capital ratios equal or exceed the following minimum ratios: Tier 1 capital ratio of 6%, total risk-based capital ratio of 10%, and a Tier 1 leverage ratio of 5%. At September 30, 1997, the Company's Tier 1 capital, total risk-based capital and Tier 1 leverage ratios were 7.58%, 11.17% and 6.63%, respectively. Regulatory authorities have issued a proposal to allow financial institutions to include in Tier 2 capital 45 percent of the net unrealized pre-tax gains on available-for-sale equity securities. Had this proposal been in effect at September 30, 1997, the total capital ratio of SunTrust would have been approximately 250 basis points higher. In April 1997, the Board of Directors authorized the Company to repurchase up to 15,000,000 shares of SunTrust common stock. At September 30, 1997, the Company has a remaining 14,329,694 shares that may be purchased under this authorization. Page 18 Nonbanking Subsidiaries. SunTrust Mortgage, Inc. originates and services mortgage loans on both residential and income property, principally throughout Florida, Georgia and Tennessee. SunTrust Mortgage is primarily a mortgage banker selling to the secondary market and representing institutional investors. SunTrust Mortgage also assists various SunTrust banks in their origination of mortgage loans for sale in the secondary market and for retention in their portfolio. At September 30, 1997, the servicing portfolio was $15.9 billion, which includes $10.0 billion in loans serviced for subsidiary banks of SunTrust. SunTrust Insurance Company operates as a reinsurer for credit life and accident and health insurance sold to loan customers of SunTrust. SunTrust Insurance Services is engaged in selling various types of insurance products, such as property and casualty, life and health insurance. SunTrust Securities engages in securities brokerage services and conducts incidental activities such as offering custodial and cash management services. SunTrust Capital Markets, Inc. serves as the investment banking arm of SunTrust. Its business activities include public finance, corporate finance and the sale of investment securities to corporations, institutions and government entities. Personal Express Loans, Inc. operates as a consumer finance company. STI Credit Corporation operates as a leasing subsidiary, primarily for commercial customers. Other nonbank subsidiaries primarily support the Company's banking operations, providing data processing and other services. State Summary. SunTrust Banks, Inc. operates through three principal subsidiaries, SunTrust Banks of Florida, Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee, Inc., all well-established bank holding companies within their respective states. Data in Table 10 does not include financial results of SunTrust's Parent Company and certain other non-bank subsidiaries (including SunTrust BankCard N.A., which holds substantially all the credit card balances of the company). It is also before elimination of certain intercompany accounts and balances. Page 19 TABLE 10 - FINANCIAL HIGHLIGHTS - BANKING SUBSIDIARIES (Dollars in Millions)
SunTrust Banks SunTrust Banks SunTrust Banks of Florida, Inc. of Georgia, Inc. of Tennessee, Inc. 1997 1996 1997 1996 1997 1996 Summary of Operations Net interest income (FTE) $751.9 $704.1 $490.8 $445.6 $219.9 $204.7 Provision for loan losses 31.0 32.0 15.6 18.5 6.6 6.7 Trust income 115.6 106.5 85.3 75.9 28.6 26.6 Other noninterest income 228.9 200.8 149.4 129.8 64.9 57.7 Personnel expense 258.1 241.3 170.9 151.2 82.9 76.7 Other noninterest expense 370.3 334.0 219.1 188.4 93.4 85.4 Net income 268.3 247.5 208.2 189.0 80.6 73.8 Selected Average Balances Total assets 25,270 22,845 21,122 17,189 7,518 6,809 Earning assets 23,822 21,370 16,542 13,721 7,235 6,528 Loans 17,954 16,159 13,151 10,968 5,624 4,899 Total deposits 18,364 18,280 11,838 10,317 5,766 5,495 Realized shareholders' equity 2,078 1,971 1,493 1,344 600 563 At September 30 Total assets 26,055 23,307 21,440 19,252 7,723 7,133 Earning assets 24,368 21,688 16,887 15,143 7,345 6,793 Loans 18,550 16,737 13,780 11,731 5,763 5,185 Reserve for loan losses 385 380 202 197 113 116 Total deposits 18,372 18,104 11,908 11,420 5,957 5,578 Realized shareholders' equity 2,150 2,037 1,634 1,405 627 585 Total shareholders' equity 2,170 2,024 3,465 2,918 635 582 Credit Quality Net loan charge-offs 15.1 14.2 9.0 13.1 7.8 5.2 Nonperforming loans 90.5 117.5 49.2 48.7 14.9 21.2 Other real estate owned 21.8 31.2 3.2 5.6 10.4 15.1 Ratios ROA 1.42 % 1.45 % 1.53 % 1.67 % 1.43 % 1.45 % ROE 17.27 16.77 18.65 18.78 17.95 17.51 Net interest margin 4.22 4.41 3.97 4.34 4.06 4.20 Efficiency ratio 57.31 56.88 53.75 52.13 56.23 56.14 Total shareholders' equity/assets 8.33 8.68 16.16 15.16 8.22 8.17 Net loan charge-offs to average loans 0.12 0.12 0.09 0.16 0.19 0.15 Nonperforming loans to total loans 0.50 0.72 0.36 0.42 0.26 0.42 Nonperforming assets to total loans plus other real estate owned 0.62 0.91 0.39 0.47 0.45 0.71 Reserve to loans 2.13 2.33 1.49 1.71 2.00 2.29 Reserve to nonperforming loans 425.9 323.6 410.8 405.2 757.4 548.5 For the nine month period ended September 30. At September 30. Annualized for the first nine months.
Page 20 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit Index: Exhibit Exhibit No. Page No. No. Statement re: Computation of Per Share Earnings 11 22 (b) SunTrust did not file any reports on Form 8-K during the third quarter of 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized this 14th day of November, 1997 SunTrust Banks, Inc. (Registrant) /s/ W.P. O'Halloran William P. O'Halloran Senior Vice President and Controller (Chief Accounting Officer) Page 21 EX-11 2 EXHIBIT 11 Statement re: Computation of Per Share Earnings (In thousands, except per share data)
Three Months Nine Months Ended September 30 Ended September 30 1997 1996 1997 1996 Primary Net income $168,578 $155,588 $495,070 $458,104 Average common shares outstanding 211,584 223,178 214,517 224,528 Average common share equivalents outstanding : Stock options 1,636 1,352 1,524 1,361 Restricted sock (1,549) (1,847) (1,575) (1,850) Average primary common shares 211,671 222,683 214,466 224,039 Earnings per common share - Primary $ 0.80 $ 0.70 $ 2.31 $ 2.04 Fully Diluted Net income $168,578 $155,588 $495,070 $458,104 Average common shares outstanding 211,584 223,178 214,517 224,528 Average common share equivalents outstanding : Stock options 1,672 1,372 1,555 1,380 Restricted sock (1,549) (1,847) (1,564) (1,847) Average fully diluted common shares 211,707 222,703 214,508 224,061 Earnings per common share - Fully Diluted $ 0.80 $ 0.70 $ 2.31 $ 2.04 Includes the incremental effect of stock options and restricted stock outstanding computed under the treasury stock method.
EX-27 3 ARTICLE 9 FDS FOR 10Q
9 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 2,638,422 9,969 847,025 213,774 11,346,407 0 0 38,475,470 747,077 55,454,191 36,217,054 8,434,477 2,787,359 3,026,245 216,608 0 0 4,772,448 55,454,191 2,239,149 403,297 53,945 2,696,391 862,791 1,287,428 1,408,963 84,439 1,090 1,251,697 759,665 495,070 0 0 495,070 2.31 2.31 4.15 152,259 41,414 2,732 0 724,677 104,793 41,582 747,077 0 0 747,077
-----END PRIVACY-ENHANCED MESSAGE-----