EX-99.1 3 dex991.htm NEWS RELEASE News Release

Exhibit 99.1

 

News


 

LOGO

 

Contact:

    
Investors    Media

Gary Peacock

  

Barry Koling

(404) 658-4879

  

(404) 230-5268

 

For Immediate Release

April 8, 2004

 

SunTrust Reports First Quarter Earnings

Company Cites “Another Quarter” of Positive Performance Trends, Good Bottom Line Results

 

ATLANTA - SunTrust Banks, Inc. (NYSE: STI) today reported net income for the first quarter of 2004 of $358.5 million, up 9% from the first quarter of 2003. Net income per diluted share was $1.26, up 8% from the $1.17 per diluted share earned in the first quarter of 2003.

 

“The first quarter of 2004 was another good one for SunTrust and a positive start to the year,” said L. Phillip Humann, SunTrust chairman, president and chief executive officer. “The pattern of positive performance trends that has been steadily picking up steam since the middle of last year is not only continuing, but having an increasingly visible impact on the bottom line.”

 

Mr. Humann cited in particular strong revenue generation, excellent fee income growth, continued net interest margin expansion and effective expense discipline. On the other hand, Mr. Humann noted that “demand for bank loans by large corporate clients remains elusive.” Mr. Humann added that SunTrust’s first quarter results are supportive of the Company’s stated goal of delivering strong, sustainable earnings growth over a multi-year time frame, under different economic scenarios.

 

For the quarter, reported return on average total assets (ROA) was 1.16%, and return on average total equity (ROE) was 14.65%. Return on average assets less net unrealized gains on securities was 1.19% and return on average realized equity was 17.59% for the quarter. The Company believes ROA and ROE excluding net unrealized gains from the Company’s securities portfolio is the more indicative performance measure in this area due to SunTrust’s ownership of 48 million shares of The Coca-Cola Company.

 

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2

 

Fully taxable net interest income was $863.9 million in the first quarter, up 4% from the first quarter of 2003. The net interest margin for the quarter was 3.13%, up 4 basis points from the fourth quarter of 2003. As expected, the Company was able to restructure and deconsolidate its multi-seller commercial paper conduit, Three Pillars Funding on March 1, 2004. Excluding the impact of Three Pillars Funding, the net interest margin was up 2 basis points from the fourth quarter of 2003.

 

Average loans for the first quarter were $79.9 billion, up 9% from the first quarter of 2003, and average earning assets were $111.0 billion, up 6% from the first quarter of 2003. Not including the impact of Three Pillars, average loans in the first quarter were up 7% and average earnings assets were up 4% from the first quarter of 2003.

 

Average consumer and commercial deposits for the first quarter were $70.4 billion, up 4% from the first quarter of 2003. As one example of SunTrust’s institutional emphasis on customer sales, the Company noted particularly strong continued growth in both DDA deposits and NOW deposit categories, up 17% and 9% respectively from the first quarter of 2003.

 

The positive impact of SunTrust’s sales focus was also reflected in noninterest income, excluding net securities gains, of $590.2 million in the quarter, up 17% from the first quarter of 2003. Total noninterest income including net securities gains was $595.1 million for the quarter, up 9% from the first quarter of 2003.

 

Total noninterest income and noninterest income excluding net securities gains both represented 41% of total revenue for the first quarter of 2004.

 

Total noninterest expense in the first quarter was $889.7 million, up 9% from the first quarter of 2003 and essentially flat from the fourth quarter of 2003. Personnel-related expenses, SunTrust’s largest operating expense component, while up 7% from a year ago, were down 2% from the prior quarter.

 

Net charge-offs in the first quarter were $58.8 million or 0.30% of average loans, down from $79.8 million, or 0.44% of average loans in the first quarter of 2003. The provision for loan losses was $59.4 million for the first quarter of 2004.

 

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Nonperforming assets were $331.9 million at quarter end or 0.42% of loans, other real estate owned and other repossessed assets, down 12% from $378.1 million as of December 31, 2003. Nonperforming assets at March 31, 2004 included $302.6 million in nonperforming loans, $18.4 million in other real estate owned and $11.0 million in other repossessed assets. The allowance for loan losses at March 31, 2004 was $942.5 million and represented 1.19% of period-end loans and 311.5% of nonperforming loans. SunTrust’s net charge-off and nonperforming asset levels continue to compare very favorably with the most recently published industry averages.

 

At March 31, 2004, SunTrust had total assets of $125.2 billion. Equity capital of $10.1 billion represented 8.1% of total assets. Book value per share was $35.74, up 15% from March 31, 2003.

 

To view the corresponding financial tables and information, please refer to the Investor Relations section located under “About SunTrust” on our Web site at www.suntrust.com. This information may also be directly accessed via the quick link entitled “1st Quarter Earnings Release” located at the lower right hand corner of the SunTrust homepage.

 

SunTrust management will host a conference call on April 8, 2004 at 8:30 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals are encouraged to call in beginning at 8:15 a.m. (Eastern Time) by dialing 1-888-822-9863 (Passcode: 1Q04; Leader: Gary Peacock.). Individuals calling from outside the United States should dial 1-484-630-1854 (Passcode: 1Q04; Leader: Gary Peacock). A replay of the call will be available beginning April 8, 2004 and ending April 22, 2004 at 5:00 p.m. (Eastern Time) by dialing 1-888-296-6941 (domestic) or 1-402-998-0531 (international).

 

Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust Web site at www.suntrust.com. The webcast will be hosted under “Investor Relations” located under “About SunTrust” or may be accessed directly from the SunTrust home page by clicking on the Earnings related link, “1st Quarter Earnings Release”. Beginning the afternoon of April 8, 2004, listeners may access an archived version of the presentation in the “Webcasts” subsection found under “Investor Relations”. A link to the Investor Relations page is also found in the footer of the SunTrust home page.

 

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SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is one of the nation’s largest commercial banking organizations. The Company operates through an extensive distribution network primarily in Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia and also serves customers in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the company provides credit cards, mortgage banking, insurance, brokerage and capital markets services. SunTrust’s Internet address is www.suntrust.com.

 

###

 

This press release may contain forward-looking statements, as defined by federal securities law, which involve significant risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. SunTrust does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Any such statements are made in reliance on the safe harbor protections provided under the Private Securities Act of 1995. For further information regarding SunTrust, please read the SunTrust reports filed with the SEC and available at www.sec.gov.

 

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5

 

SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

 

     Three Months Ended

   

%
Change


 
     2004

    2003

   

EARNINGS & DIVIDENDS

                      

Period Ended March 31

(Dollars in millions except per share data)

                      

Net income

   $ 358.5     $ 327.8     9.3 %

Total revenue

     1,459.0       1,380.7     5.7  

Total revenue less securities gains1

     1,454.1       1,338.6     8.6  

Earnings per share

                      

Diluted

   $ 1.26     $ 1.17     7.7  

Basic

     1.28       1.18     8.5  

Dividends paid per common share

     0.50       0.45     11.1  

Average shares outstanding (000s)

                      

Diluted

     283,523       281,330     0.8  

Basic

     279,523       278,631     0.3  

KEY RATIOS

                      

Return on average total assets

     1.16 %     1.12 %   3.6 %

Return on average assets less net unrealized gains on securities2

     1.19       1.15     3.5  

Return on average total equity

     14.65       15.13     (3.2 )

Return on average realized equity2

     17.59       18.16     (3.1 )

Net interest margin3

     3.13       3.21     (2.5 )

Efficiency ratio3

     60.98       59.26     2.9  

Period Ended March 31

                      

Book value per share

     35.74       31.06     15.1  

Total average shareholders’ equity to total average assets

     7.95       7.43     7.0  

Tier 1 capital ratio

     8.05 4     7.40     8.8  

Total capital ratio

     12.00 4     11.38     5.4  

Tier 1 leverage ratio

     7.60 4     7.15     6.3  

CONDENSED BALANCE SHEETS (Dollars in millions)

                      

Average Balances

                      

Securities available for sale

   $ 25,407     $ 23,256     9.3 %

Loans held for sale

     5,316       8,045     (33.9 )

Loans

     79,905       73,050     9.4  

Other earning assets

     2,990       3,210     (6.9 )

Allowance for loan losses

     (954 )     (942 )   1.2  

Intangible assets

     1,701       1,553     9.5  

Other assets

     9,489       10,104     (6.1 )
    


 


     

Total assets

   $ 123,854     $ 118,276     4.7  
    


 


     

Consumer and commercial deposits

   $ 70,361     $ 67,467     4.3  

Purchased liabilities5

     22,915       23,772     (3.6 )

Long-term debt

     15,413       11,783     30.8  

Other liabilities

     5,324       6,468     (17.7 )
    


 


     

Total liabilities

     114,013       109,490     4.1  

Realized shareholders’ equity

     8,195       7,323     11.9  

Accumulated other comprehensive income

     1,646       1,463     12.5  
    


 


     

Total liabilities and shareholders’ equity

   $ 123,854     $ 118,276     4.7  
    


 


     

Period Ended March 31

                      

Securities available for sale

   $ 26,123     $ 24,241     7.8  

Loans held for sale

     5,852       8,221     (28.8 )

Loans

     79,213       73,850     7.3  

Other earning assets

     3,470       3,295     5.3  

Allowance for loan losses

     (943 )     (931 )   1.2  

Intangible assets

     1,708       1,577     8.3  

Other assets

     9,822       9,809     0.1  
    


 


     

Total assets

   $ 125,245     $ 120,062     4.3  
    


 


     

Consumer and commercial deposits

   $ 72,449     $ 69,726     3.9  

Purchased liabilities5

     19,767       23,593     (16.2 )

Long-term debt

     16,810       11,842     41.9  

Other liabilities

     6,128       6,203     (1.2 )
    


 


     

Total liabilities

     115,154       111,364     3.4  

Realized shareholders’ equity

     8,309       7,317     13.5  

Accumulated other comprehensive income

     1,782       1,381     29.0  
    


 


     

Total liabilities and shareholders’ equity

   $ 125,245     $ 120,062     4.3  
    


 


     

1 SunTrust presents total revenue less securities gains. The Company believes total revenue without securities gains is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven.
2 SunTrust presents a return on average assets less net unrealized gains on securities and a return on average realized equity. The foregoing numbers reflect adjustments to remove the effects of the ownership by the Company of 48.3 million shares of The Coca-Cola Company. The Company uses this information internally to gauge its actual performance in the industry. The Company believes that the return on average assets less the net unrealized gains on the securities portfolio is more indicative of the Company’s return on assets because it more accurately reflects the return on the assets that are related to the Company’s core businesses. The Company also believes that the return on average realized equity is more indicative of the Company’s return on equity because the excluded equity relates primarily to a long term holding of a specific security.
3 The net interest margin and efficiency ratios are presented on a fully taxable-equivalent (FTE) basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
4 Current period tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the press release date.
5 Purchased liabilities include foreign and brokered deposits, funds purchased and other short-term borrowings.


6

 

SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

 

     Three Months Ended

   

%
Change


 
     2004

    2003

   

CREDIT DATA (Dollars in thousands)

                      

Period Ended March 31

                      

Allowance for loan losses - beginning

   $ 941,922     $ 930,114     1.3 %

Provision for loan losses

     59,388       80,803     (26.5 )

Net charge-offs

                      

Consumer

     26,090       35,775     (27.1 )

Residential

     9,380       2,440     284.4  

Commercial

     23,317       41,622     (44.0 )
    


 


     

Allowance for loan losses - ending

   $ 942,523     $ 931,080     1.2  
    


 


     

Total net charge-offs

   $ 58,787     $ 79,837     (26.4 )

Net charge-offs to average loans

     0.30 %     0.44 %   (31.8 )

Period Ended March 31

                      

Nonaccrual loans

   $ 283,918     $ 520,052     (45.4 )

Restructured loans

     18,661       —       100.0  
    


 


     

Total nonperforming loans

     302,579       520,052     (41.8 )

Other real estate owned (OREO)

     18,380       18,064     1.7  

Other repossessed assets

     10,953       10,279     6.6  
    


 


     

Total nonperforming assets

   $ 331,912     $ 548,395     (39.5 )
    


 


     

Total nonperforming loans to total loans

     0.38 %     0.70 %   (45.7 )

Total nonperforming assets to total loans plus OREO and other repossessed assets

     0.42       0.74     (43.2 )

Allowance to period-end loans

     1.19       1.26     (5.6 )

Allowance to nonperforming loans

     311.5       179.0     74.0  


7

 

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

     As of March 31

    Increase/(Decrease)

 
     2004

    2003

    Amount

    %

 

ASSETS

                              

Cash and due from banks

   $ 3,364,176     $ 3,817,238     $ (453,062 )   (11.9 )%

Interest-bearing deposits in other banks

     16,398       10,809       5,589     51.7  

Trading assets

     2,139,399       1,861,777       277,622     14.9  

Securities available for sale1

     26,122,547       24,241,046       1,881,501     7.8  

Funds sold and securities purchased under agreements to resell

     1,314,231       1,422,896       (108,665 )   (7.6 )

Loans held for sale

     5,852,118       8,220,705       (2,368,587 )   (28.8 )

Loans

     79,212,829       73,849,829       5,363,000     7.3  

Allowance for loan losses

     (942,523 )     (931,080 )     (11,443 )   1.2  
    


 


 


     

Net loans

     78,270,306       72,918,749       5,351,557     7.3  

Goodwill

     1,079,640       967,949       111,691     11.5  

Other intangible assets

     628,223       609,211       19,012     3.1  

Other assets

     6,457,463       5,991,767       465,696     7.8  
    


 


 


     

Total Assets2

   $ 125,244,501     $ 120,062,147     $ 5,182,354     4.3  
    


 


 


     

LIABILITIES

                              

Noninterest-bearing consumer and commercial deposits

   $ 20,136,810     $ 17,964,170     $ 2,172,640     12.1  

Interest-bearing consumer and commercial deposits

     52,312,167       51,761,607       550,560     1.1  
    


 


 


     

Total consumer and commercial deposits

     72,448,977       69,725,777       2,723,200     3.9  

Brokered deposits

     3,568,493       4,180,861       (612,368 )   (14.6 )

Foreign deposits

     4,852,124       4,099,738       752,386     18.4  
    


 


 


     

Total deposits

     80,869,594       78,006,376       2,863,218     3.7  

Funds purchased and securities sold under agreements to repurchase

     10,197,739       14,619,021       (4,421,282 )   (30.2 )

Other short-term borrowings

     1,148,290       693,129       455,161     65.7  

Long-term debt

     16,809,810       11,842,215       4,967,595     41.9  

Trading liabilities

     1,028,592       1,048,005       (19,413 )   (1.9 )

Other liabilities

     5,100,024       5,155,112       (55,088 )   (1.1 )
    


 


 


     

Total liabilities

     115,154,049       111,363,858       3,790,191     3.4  
    


 


 


     

SHAREHOLDERS’ EQUITY

                              

Preferred stock, no par value

     —         —         —       —    

Common stock, $1.00 par value

     294,163       294,163       —       —    

Additional paid in capital

     1,293,732       1,275,642       18,090     1.4  

Retained earnings

     7,366,636       6,523,222       843,414     12.9  

Treasury stock and other

     (645,739 )     (775,550 )     129,811     (16.7 )
    


 


 


     

Realized shareholders’ equity

     8,308,792       7,317,477       991,315     13.5  

Accumulated other comprehensive income

     1,781,660       1,380,812       400,848     29.0  
    


 


 


     

Total shareholders’ equity

     10,090,452       8,698,289       1,392,163     16.0  
    


 


 


     

Total Liabilities and Shareholders’ Equity

   $ 125,244,501     $ 120,062,147     $ 5,182,354     4.3  
    


 


 


     

Common shares outstanding

     282,331,789       280,023,826       2,307,963     0.8  

Common shares authorized

     750,000,000       750,000,000       —       —    

Treasury shares of common stock

     11,830,968       14,138,931       (2,307,963 )   (16.3 )

1Includes net unrealized gains of:

   $ 2,787,148     $ 2,207,002     $ 580,146     26.3  

2Includes earning assets of:

     111,870,374       107,400,060       4,470,314     4.2  


8

 

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

 

     Three Months Ended

 
     March 31

   Increase/(Decrease)

 
     2004

   2003

   Amount

    %

 

Interest income

   $ 1,173,864    $ 1,218,121    $ (44,257 )   (3.6 )%

Interest expense

     322,216      395,651      (73,435 )   (18.6 )
    

  

  


     

NET INTEREST INCOME

     851,648      822,470      29,178     3.5  

Provision for loan losses

     59,388      80,803      (21,415 )   (26.5 )
    

  

  


     

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     792,260      741,667      50,593     6.8  
    

  

  


     

NONINTEREST INCOME

                            

Service charges on deposit accounts

     163,218      157,821      5,397     3.4  

Trust and investment management income

     136,218      120,795      15,423     12.8  

Retail investment services

     45,738      37,468      8,270     22.1  

Other charges and fees

     92,747      78,271      14,476     18.5  

Investment banking income

     44,813      33,812      11,001     32.5  

Trading account profits and commissions

     29,390      30,793      (1,403 )   (4.6 )

Credit card and other fees

     31,694      28,673      3,021     10.5  

Other noninterest income

     46,341      17,987      28,354     157.6  

Securities gains

     4,927      42,039      (37,112 )   (88.3 )
    

  

  


     

Total noninterest income

     595,086      547,659      47,427     8.7  
    

  

  


     

NONINTEREST EXPENSE

                            

Personnel expense

     506,796      473,725      33,071     7.0  

Net occupancy expense

     61,859      57,722      4,137     7.2  

Outside processing and software

     65,626      57,054      8,572     15.0  

Equipment expense

     45,085      43,470      1,615     3.7  

Marketing and customer development

     30,219      24,879      5,340     21.5  

Amortization of intangible assets

     15,640      16,717      (1,077 )   (6.4 )

Other noninterest expense

     164,523      144,662      19,861     13.7  
    

  

  


     

Total noninterest expense

     889,748      818,229      71,519     8.7  
    

  

  


     

INCOME BEFORE INCOME TAXES

     497,598      471,097      26,501     5.6  

Provision for income taxes

     139,121      143,249      (4,128 )   (2.9 )
    

  

  


     

NET INCOME

   $ 358,477    $ 327,848    $ 30,629     9.3  
    

  

  


     

Net interest income (taxable-equivalent)1

   $ 863,904    $ 833,013    $ 30,891     3.7  

Earnings per share

                            

Diluted

     1.26      1.17      0.09     7.7  

Basic

     1.28      1.18      0.10     8.5  

Cash dividends paid per common share

     0.50      0.45      0.05     11.1  

Average shares outstanding (000s)

                            

Diluted

     283,523      281,330      2,193     0.8  

Basic

     279,523      278,631      892     0.3  

1 Net interest income includes the effects of taxable-equivalent adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis.


9

 

SunTrust Banks, Inc. and Subsidiaries

SELECTED FINANCIAL INFORMATION

 

     1st Quarter
2004


    4th Quarter
2003


    3rd Quarter
2003


    2nd Quarter
2003


    1st Quarter
2003


 

RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

                                        

Net interest income

   $ 851,648     $ 865,520     $ 832,800     $ 799,513     $ 822,470  

Provision for loan losses

     59,388       70,286       79,799       82,662       80,803  
    


 


 


 


 


Net credit income

     792,260       795,234       753,001       716,851       741,667  

Securities gains

     4,927       19,501       31,098       31,238       42,039  

Other noninterest income

     590,159       564,571       543,380       565,554       505,620  
    


 


 


 


 


Net credit and noninterest income

     1,387,346       1,379,306       1,327,479       1,313,643       1,289,326  

Noninterest expense

     889,748       884,794       859,865       837,728       818,229  
    


 


 


 


 


Income before income taxes

     497,598       494,512       467,614       475,915       471,097  

Provision for income taxes

     139,121       152,005       136,031       145,556       143,249  
    


 


 


 


 


Net Income

   $ 358,477     $ 342,507     $ 331,583     $ 330,359     $ 327,848  
    


 


 


 


 


Net interest income (taxable-equivalent)

   $ 863,904     $ 877,501     $ 844,388     $ 810,415     $ 833,013  

Total revenue

     1,458,990       1,461,573       1,418,866       1,407,207       1,380,672  

Total revenue less securities gains1

     1,454,063       1,442,072       1,387,768       1,375,969       1,338,633  

Earnings per share

                                        

Diluted

   $ 1.26     $ 1.21     $ 1.18     $ 1.17     $ 1.17  

Basic

     1.28       1.23       1.19       1.19       1.18  

Dividends paid per common share

     0.50       0.45       0.45       0.45       0.45  

Average shares outstanding (000s)

                                        

Diluted

     283,523       282,537       281,567       280,287       281,330  

Basic

     279,523       278,852       278,296       277,397       278,631  

SELECTED AVERAGE BALANCES

(Dollars in millions)

                                        

Total assets

   $ 123,854     $ 124,756     $ 126,702     $ 119,448     $ 118,276  

Earning assets

     111,038       112,730       112,329       106,606       105,249  

Unrealized gains on securities available for sale

     2,580       2,364       2,402       2,293       2,312  

Loans

     79,905       79,370       77,733       74,311       73,050  

Interest-bearing liabilities

     89,792       91,213       90,464       86,414       86,834  

Total deposits

     80,362       81,082       81,373       79,804       77,847  

Shareholders’ equity

     9,840       9,436       9,237       8,864       8,787  

SELECTED RATIOS

                                        

Net interest margin2

     3.13 %     3.09 %     2.98 %     3.05 %     3.21 %

Return on average total assets

     1.16       1.09       1.04       1.11       1.12  

Return on average assets less net unrealized gains on securities3

     1.19       1.11       1.06       1.13       1.15  

Return on average total equity

     14.65       14.40       14.24       14.95       15.13  

Return on average realized equity3

     17.59       17.13       17.06       17.87       18.16  

CREDIT DATA

(Dollars in thousands)

                                        

Allowance for loan losses - beginning

   $ 941,922     $ 941,423     $ 940,889     $ 931,080     $ 930,114  

Allowance from acquisitions and other activity - net

     —         —         —         9,324       —    

Provision for loan losses

     59,388       70,286       79,799       82,662       80,803  

Net charge-offs

     58,787       69,787       79,265       82,177       79,837  
    


 


 


 


 


Allowance for loan losses - ending

   $ 942,523     $ 941,922     $ 941,423     $ 940,889     $ 931,080  
    


 


 


 


 


Net charge-offs to average loans

     0.30 %     0.35 %     0.40 %     0.44 %     0.44 %

Period Ended

                                        

Nonaccrual loans

   $ 283,918     $ 336,587     $ 423,320     $ 480,582     $ 520,052  

Restructured loans

     18,661       14,782       9,241       2,500       —    
    


 


 


 


 


Total nonperforming loans

     302,579       351,369       432,561       483,082       520,052  

Other real estate owned (OREO)

     18,380       16,458       19,607       20,887       18,064  

Other repossessed assets

     10,953       10,270       11,637       11,421       10,279  
    


 


 


 


 


Total nonperforming assets

   $ 331,912     $ 378,097     $ 463,805     $ 515,390     $ 548,395  
    


 


 


 


 


Total nonperforming loans to total loans

     0.38 %     0.44 %     0.55 %     0.64 %     0.70 %

Total nonperforming assets to total loans plus
OREO and other repossessed assets

     0.42       0.47       0.59       0.68       0.74  

Allowance to period-end loans

     1.19       1.17       1.19       1.25       1.26  

Allowance to nonperforming loans

     311.5       268.1       217.6       194.8       179.0  

1 SunTrust presents total revenue less securities gains. The Company believes total revenue without securities gains is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven.
2 The net interest margin is presented on a fully taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
3 SunTrust presents a return on average assets less net unrealized gains on securities and a return on average realized equity. The foregoing numbers reflect adjustments to remove the effects of the ownership by the Company of 48.3 million shares of The Coca-Cola Company. The Company uses this information internally to gauge its actual performance in the industry. The Company believes that the return on average assets less the net unrealized gains on the securities portfolio is more indicative of the Company’s return on assets because it more accurately reflects the return on the assets that are related to the Company’s core businesses. The Company also believes that the return on average realized equity is more indicative of the Company’s return on equity because the excluded equity relates primarily to a long term holding of a specific security.


10

 

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID

(Dollars in millions; yields on taxable-equivalent basis)

 

     Three Months Ended

 
     March 31, 2004

    March 31, 2003

 
     Average
Balances


    Interest
Income/
Expense


  

Yields/

Rates


    Average
Balances


    Interest
Income/
Expense


   Yields/
Rates


 

Assets

                                          

Loans:

                                          

Real estate 1-4 family

   $ 17,758.0     $ 230.5    5.19 %   $ 14,622.6     $ 230.3    6.30 %

Real estate construction

     4,546.3       49.3    4.36       3,947.4       47.4    4.87  

Real estate equity

     7,111.8       73.9    4.18       5,417.8       61.6    4.61  

Real estate commercial

     9,295.0       106.9    4.63       9,105.3       117.9    5.25  

Commercial

     28,464.1       250.2    3.54       27,837.8       270.4    3.94  

Business credit card

     140.0       2.4    6.74       119.7       2.2    7.26  

Consumer – direct

     3,533.1       42.2    4.81       3,755.2       49.7    5.36  

Consumer – indirect

     8,727.4       130.3    6.01       7,711.0       139.1    7.32  

Nonaccrual and restructured

     329.2       6.0    7.33       533.0       2.7    2.03  
    


 

  

 


 

  

Total loans

     79,904.9       891.7    4.49       73,049.8       921.3    5.11  

Securities available for sale:

                                          

Taxable

     22,462.5       212.9    3.79       20,554.3       181.3    3.53  

Tax-exempt

     364.6       5.7    6.21       390.1       6.4    6.57  
    


 

  

 


 

  

Total securities available for sale

     22,827.1       218.6    3.83       20,944.4       187.7    3.58  

Funds sold and securities purchased under agreement to resell

     1,240.5       3.3    1.06       1,472.9       4.6    1.25  

Loans held for sale

     5,316.1       67.1    5.05       8,044.7       111.0    5.52  

Interest-bearing deposits

     15.2       —      0.85       11.6       —      1.15  

Trading assets

     1,734.4       5.4    1.24       1,725.6       4.1    0.96  
    


 

  

 


 

  

Total earning assets

     111,038.2       1,186.1    4.30       105,249.0       1,228.7    4.73  

Allowance for loan losses

     (953.7 )                  (942.0 )             

Cash and due from banks

     3,371.2                    3,475.4               

Premises and equipment

     1,612.0                    1,603.4               

Other assets

     6,205.7                    6,578.8               

Unrealized gains on securities available for sale

     2,580.3                    2,311.6               
    


              


            

Total assets

   $ 123,853.7                  $ 118,276.2               
    


              


            

Liabilities and Shareholders’ Equity

                                          

Interest-bearing deposits:

                                          

NOW accounts

   $ 12,332.1     $ 11.8    0.38 %   $ 11,326.5     $ 14.9    0.53 %

Money Market accounts

     22,136.8       42.3    0.77       21,856.3       60.4    1.12  

Savings

     6,334.2       10.1    0.64       6,218.6       14.0    0.91  

Consumer time

     7,268.8       37.6    2.08       8,435.3       61.0    2.93  

Other time

     3,392.4       19.9    2.36       3,442.3       16.0    1.89  
    


 

  

 


 

  

Total interest-bearing consumer and commercial deposits

     51,464.3       121.7    0.95       51,279.0       166.3    1.31  

Brokered deposits

     3,903.1       22.5    2.28       3,914.5       34.0    3.47  

Foreign deposits

     6,097.5       16.5    1.07       6,465.4       19.9    1.23  
    


 

  

 


 

  

Total interest-bearing deposits

     61,464.9       160.7    1.05       61,658.9       220.2    1.45  

Funds purchased and securities sold under agreements to repurchase

     10,175.6       19.8    0.77       12,644.7       32.5    1.03  

Other short-term borrowings

     2,738.5       11.0    1.62       747.2       2.1    1.15  

Long-term debt

     15,412.9       130.7    3.41       11,782.9       140.9    4.85  
    


 

  

 


 

  

Total interest-bearing liabilities

     89,791.9       322.2    1.44       86,833.7       395.7    1.85  

Noninterest-bearing deposits

     18,896.7                    16,187.8               

Other liabilities

     5,324.8                    6,468.1               

Realized shareholders’ equity

     8,194.6                    7,323.1               

Accumulated other comprehensive income

     1,645.7                    1,463.5               
    


              


            

Total liabilities and shareholders’ equity

   $ 123,853.7                  $ 118,276.2               
    


              


            

Interest rate spread

                  2.86 %                  2.88 %
                   

                

Net Interest Margin

                  3.13 %                  3.21 %
                   

                


SunTrust Banks, Inc. and Subsidiaries

RECONCILEMENT OF NON-GAAP MEASURES

APPENDIX A TO THE PRESS RELEASE

 

     1st Quarter
2004


    4th Quarter
2003


    3rd Quarter
2003


    2nd Quarter
2003


    1st Quarter
2003


 

NON-GAAP MEASURES PRESENTED IN THE PRESS RELEASE

(Dollars in thousands)

                                        

Return on average total assets

     1.16 %     1.09 %     1.04 %     1.11 %     1.12 %

Impact of excluding net unrealized securities gains

     0.03       0.02       0.02       0.02       0.03  
    


 


 


 


 


Return on average total assets less net unrealized gains on securities

     1.19 %     1.11 %     1.06 %     1.13 %     1.15 %
    


 


 


 


 


Return on average total shareholders’ equity

     14.65 %     14.40 %     14.24 %     14.95 %     15.13 %

Impact of excluding net unrealized securities gains

     2.94       2.73       2.82       2.92       3.03  
    


 


 


 


 


Return on average realized shareholders’ equity

     17.59 %     17.13 %     17.06 %     17.87 %     18.16 %
    


 


 


 


 


Net interest income

   $ 851,648     $ 865,520     $ 832,800     $ 799,513     $ 822,470  

FTE adjustment

     12,256       11,981       11,588       10,902       10,543  
    


 


 


 


 


Net interest income - FTE

     863,904       877,501       844,388       810,415       833,013  

Noninterest income

     595,086       584,072       574,478       596,792       547,659  
    


 


 


 


 


Total revenue

     1,458,990       1,461,573       1,418,866       1,407,207       1,380,672  

Securities gains

     (4,927 )     (19,501 )     (31,098 )     (31,238 )     (42,039 )
    


 


 


 


 


Total revenue less securities gains

   $ 1,454,063     $ 1,442,072     $ 1,387,768     $ 1,375,969     $ 1,338,633  
    


 


 


 


 


 

    

1st Quarter

2004


   

4th Quarter

2003


    Change
%2


    1st Quarter
2004


   

1st Quarter

2003


    Change
%


 

NON-GAAP DISCLOSURES FOR IMPACTS OF THREE PILLARS,
AFFORDABLE HOUSING CONSOLIDATION, AND FICA

(Dollars in millions)

                                            

Average loans - reported

   $ 79,905     $ 79,370     0.7 %   $ 79,905     $ 73,050     9.4 %

Impact of Three Pillars

     (1,430 )     (2,243 )           (1,430 )     —          
    


 


       


 


     

Average loans excluding Three Pillars

   $ 78,475     $ 77,127     1.7     $ 78,475     $ 73,050     7.4  
    


 


       


 


     

Average earning assets – reported

   $ 111,038     $ 112,730     (1.5 )   $ 111,038     $ 105,249     5.5  

Impact of Three Pillars

     (1,715 )     (2,699 )           (1,715 )     —          
    


 


       


 


     

Average earning assets excluding Three Pillars

   $ 109,323     $ 110,031     (0.6 )   $ 109,323     $ 105,249     3.9  
    


 


       


 


     

Average commercial loans – reported

   $ 28,464     $ 29,289     (2.8 )   $ 28,464     $ 27,838     2.2  

Impact of Three Pillars

     (1,430 )     (2,243 )           (1,430 )     —          
    


 


       


 


     

Average commercial loans excluding Three Pillars

   $ 27,034     $ 27,046     —       $ 27,034     $ 27,838     (2.9 )
    


 


       


 


     

Average commercial loan yield – reported

     3.54 %     3.58 %   (1.1 )     3.54 %     3.94 %   (10.2 )

Impact of Three Pillars

     0.06       0.11             0.06       —          
    


 


       


 


     

Average commercial loan yield excluding Three Pillars

     3.60 %     3.69 %   (2.4 )     3.60 %     3.94 %   (8.6 )
    


 


       


 


     

Net interest margin - reported

     3.13 %     3.09 %   1.3       3.13 %     3.21 %   (2.5 )

Impact of Three Pillars

     0.04       0.06             0.04       —          

Impact of affordable housing consolidation

     0.01       0.01             0.01       —          
    


 


       


 


     

Net interest margin excluding Three Pillars and affordable housing consolidation

     3.18 %     3.16 %   0.6       3.18 %     3.21 %   (0.9 )
    


 


       


 


     

Net charge-offs to average loans – reported

     0.30 %     0.35 %   (14.3 )                      

Impact of Three Pillars

     —         0.01                              
    


 


                           

Net charge-offs to average loans excluding Three Pillars

     0.30 %     0.36 %   (16.7 )                      
    


 


                           

Allowance to period-end loans – reported

     1.19 %     1.17 %   1.7                        

Impact of Three Pillars

     —         0.03                              
    


 


                           

Allowance to period-end loans excluding Three Pillars

     1.19 %     1.20 %   (0.8 )                      
    


 


                           

Total nonperforming loans to total loans - reported

     0.38 %     0.44 %   (13.6 )                      

Impact of Three Pillars

     —         0.01                              
    


 


                           

Total nonperforming loans to total loans excluding Three Pillars

     0.38 %     0.45 %   (15.6 )                      
    


 


                           

Total nonperforming assets to total loans plus OREO and other repossessed assets - reported

     0.42 %     0.47 %   (10.6 )                      

Impact of Three Pillars

     —         0.01                              
    


 


                           

Total nonperforming assets to total loans plus OREO and other repossessed assets excluding Three Pillars

     0.42 %     0.48 %   (12.5 )                      
    


 


                           

(Dollars in thousands)

                                            

Personnel expense - reported

   $ 506,796     $ 516,171     (1.8 )                      

FICA & unemployment tax

     40,766       21,772                              
    


 


                           

Personnel expense excluding FICA & unemployment

   $ 466,030     $ 494,399     (5.7 )                      
    


 


                           

Noninterest expense - reported

   $ 889,748     $ 884,794     0.6                        

FICA & unemployment tax

     40,766       21,772                              
    


 


                           

Noninterest expense excluding FICA & unemployment tax

   $ 848,982     $ 863,022     (1.6 )                      
    


 


                           

1 Under the provisions of FASB Interpretation No. 46, SunTrust consolidated its commercial paper conduit, Three Pillars, effective July 1, 2003. As of March 1, 2004, Three Pillars was restructured and deconsolidated. Certain other affordable housing limited partnerships were also consolidated beginning in the third quarter of 2003. Adjustments were made to reported figures for comparability purposes.
2 Multiply by 4 to calculate sequential annualized growth or reductions discussed in the earnings call.

 

Appendix A