EX-99.1 2 dex991.htm NEWS RELEASE News Release

Exhibit 99.1

 

LOGO   News Release

 

Contact:

          

Investors

  Media         

Kris Dickson

  Mike McCoy         

(404) 827-6714

  (404) 588-7230         

For Immediate Release

July 22, 2011

SunTrust Reports Second Quarter 2011 Results

Earnings Per Share Increased to $0.33; Asset Quality Meaningfully Improved

 

 

ATLANTA — SunTrust Banks, Inc. (NYSE: STI) today reported net income available to common shareholders of $174 million, or $0.33 per average common share, for the second quarter of 2011. These results compare favorably to the prior quarter’s earnings of $0.08 per average common share, or $0.22 per share excluding the non-cash charge related to the redemption of the TARP preferred shares. Second quarter results improved significantly from a loss of $0.11 per share reported in the second quarter of 2010.

“Our earnings per share improvement continued this quarter,” said William H. Rogers, Jr., SunTrust’s president and chief executive officer. “While the economic recovery remains uneven, we continued to demonstrate meaningful improvements in asset quality. Additionally, our client-centric approach is driving even higher levels of loyalty and is increasingly evidencing itself in the form of enhanced performance by many of our businesses.” Mr. Rogers also noted that the company is committed to even stronger performance in the future, including an increased focus on expense management.

Second Quarter 2011 Financial Highlights

Income Statement

 

   

Net income available to common shareholders was $0.33 per average common share, compared to earnings of $0.08 per average common share, or $0.22 per share excluding the impact related to the redemption of TARP preferred shares, during the prior quarter.

 

   

Net interest income was up 1% from the prior quarter and 6% from the prior year. The growth from the prior quarter was mainly related to an additional business day in the current quarter. The change over the same quarter last year was primarily due to lower funding costs resulting from lower rates paid on deposits and a continued shift toward lower-cost deposits.

 

   

Net interest margin was stable compared to the prior quarter at 3.53% and increased 20 basis points over the second quarter of 2010.

 

   

Noninterest income increased 3% over the prior quarter due to widespread growth in consumer and commercial categories, led by strong investment banking income. Compared to the prior year, noninterest income was down 4%, primarily due to lower net gains on the sale of investment securities, lower service charges on deposit accounts, and lower valuation gains on the Company’s index-linked CDs and public debt carried at fair value.

 

   

Noninterest expense increased 5% compared to the prior quarter driven primarily by higher environmental factors, including credit-related expenses and an increase in FDIC insurance assessments. Noninterest expense increased 3% over the prior year, primarily due to compensation expenses associated with improved business performance and an increase in full-time equivalent employees.


Credit Quality

 

   

Credit quality continued to improve with net charge-offs, nonperforming loans, nonperforming assets, and early stage delinquencies all declining.

 

   

Nonperforming loans declined for the eighth consecutive quarter, decreasing 9% from the prior quarter and 23% from the prior year. Net charge-offs declined 12% and 30%, respectively.

 

   

Provision for credit losses declined due to the lower net charge-offs and the impact of improved credit quality on the allowance for loan losses. The allowance for loan losses was $2.7 billion, or 2.40% of total loans, down 9 basis points from the prior quarter.

Balance Sheet

 

   

Average loans were stable compared to the prior quarter; within the context of overall portfolio de-risking, commercial & industrial loans grew while higher-risk segments of the portfolio continued to decline.

 

   

Average client deposits grew to a record level, and the favorable trend in the deposit mix toward lower-cost accounts continued.

 

   

Estimated capital ratios are well above current regulatory requirements, as well as the Basel III proposed guidance. The Tier 1 capital and Tier 1 common ratios were estimated to be 11.10% and 9.20%, respectively.

 

     2Q 2010     1Q 2011     2Q 2011  

Income Statement

      

(Presented on a fully taxable equivalent basis)

      

(Dollars in millions, except per share data)

      

Net income

   $ 12      $ 180      $ 178   

Net (loss)/income available to common shareholders

     (56     38        174   

Earnings/(loss) per average common diluted share

     (0.11     0.08        0.33   

Earnings/(loss) per average common diluted share, excluding impact of TARP redemption

     (0.11     0.22        0.33   

Total revenue

     2,160        2,160        2,198   

Total revenue, excluding net securities gains/losses

     2,103        2,096        2,166   

Net interest income

     1,208        1,277        1,286   

Provision for credit losses

     662        447        392   

Noninterest income

     952        883        912   

Noninterest expense

     1,503        1,465        1,542   

Net interest margin

     3.33     3.53     3.53

Balance Sheet

      

(Dollars in billions)

      

Average loans

   $ 113.0      $ 115.2      $ 114.9   

Average consumer and commercial deposits

     116.5        120.7        121.9   

Capital

      

Tier 1 capital ratio (1)

     13.51     11.00     11.10

Tier 1 common equity ratio (1)

     7.92     9.05     9.20

Total average shareholders’ equity to total average assets

     13.03     13.35     11.44

Asset Quality

      

Net charge-offs to average loans (annualized)

     2.57     2.01     1.76

Allowance for loan losses to period end loans

     2.81     2.49     2.40

Nonperforming loans to total loans

     4.16     3.46     3.14

 

(1) 

Current period Tier 1 capital and Tier 1 common equity ratios are estimated as of the earnings release date.

 

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Consolidated Financial Performance

(Presented on a fully taxable-equivalent basis unless otherwise noted)

Revenue

Total revenue was $2,198 million for the second quarter of 2011 compared to $2,160 million in both the first quarter of 2011 and the second quarter of 2010. Net gains from the sales of securities were $32 million in the current quarter compared to $64 million in the first quarter of 2011 and $57 million in the second quarter of 2010. Excluding these gains, revenue increased 3% on both a sequential quarter and a prior year basis. The growth from the first quarter of 2011 was due to higher fee income, most notably investment banking income. The increase compared to the prior year quarter was due to higher net interest income, partially offset by lower deposit service charges.

For the six months ended June 30th, total revenue was $4,358 million in 2011 compared to $4,060 million for the prior year. The 7% increase was due to higher net interest income, growth in most consumer and commercial fee categories, and higher net gains from the sales of securities, partially offset by lower service charges due to the implementation of new regulatory requirements in the third quarter of 2010.

Net Interest Income

For the second quarter of 2011, net interest income was $1,286 million compared with $1,277 million in the prior quarter and $1,208 million in the prior year quarter. The 1% increase on a sequential quarter basis was mainly related to one more day in the current quarter. The 6% increase over the second quarter of 2010 was primarily attributable to lower rates paid on deposits, a continued shift in deposit mix toward lower-cost deposits, and a reduction in higher-cost funding.

Net interest margin for the second quarter of 2011 was 3.53%, consistent with the prior quarter and up 20 basis points over the prior year quarter. On a sequential quarter basis, yields on earning assets declined five basis points, driven by lower loan yields, while rates paid on interest-bearing liabilities declined seven basis points, as rates paid on deposits and long-term debt costs declined. Compared to the prior year quarter, the favorable shift in the deposit mix, lower rates paid, and reduced long-term debt contributed to a decline in interest-bearing liabilities of 34 basis points, more than offsetting the nine basis point decline in earning asset yields, which were primarily loan-related.

For the six months ended June 30th, net interest income was $2,563 million in 2011 compared to $2,410 million in 2010, an increase of 6%. Net interest margin was 3.53% in 2011, up 21 basis points. The primary drivers of the increases to net interest income and net interest margin were consistent with those described in the quarterly comparisons.

Noninterest Income

Total noninterest income was $912 million in the second quarter of 2011 compared with $883 million in the prior quarter and $952 million in the prior year quarter. The $29 million increase on a sequential quarter basis was due to broad-based growth in consumer and commercial fee categories, led by strong investment banking income, and partially offset by a $32 million decline in net gains on the sale of investment securities. Compared with the second quarter of 2010, noninterest income declined $40 million, or 4%, due to lower net gains on the sale of investment securities, lower service charges on deposit accounts, and lower valuation gains on the Company’s index-linked CDs and public debt carried at fair value. The year-over-year decline was partially offset by growth in certain consumer and commercial fee categories, including investment banking, retail investment services, and card fees.

Investment banking income was $95 million in the current quarter compared with $67 million in the prior quarter and $58 million in the prior year quarter. The increases of $28 million and $37 million

 

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compared to the prior quarter and prior year, respectively, were attributable to strong syndicated finance fees, which resulted from continued market penetration.

Trading account profits and commissions were $53 million in the current quarter compared with $52 million in the first quarter and $109 million in the second quarter of 2010. Compared to the prior quarter, the essentially flat results were driven by more favorable mark-to-market impacts on the Company’s fair value debt and index-linked CDs, which offset a decline in core trading income. Compared to the prior year, the $56 million decline in trading account profits and commissions was mainly attributable to a $60 million reduction in valuation gains on the Company’s fair value debt and index-linked CDs, as the Company’s credit spreads tightened.

Mortgage production and servicing income was a combined $76 million in the second quarter of 2011, compared with $71 million in the prior quarter and $72 million in the prior year quarter. During the current quarter, mortgage repurchase costs were $90 million, an increase of $10 million over the prior quarter due to higher agency-related repurchase requests. As of June 30, 2011, reserves for mortgage repurchases totaled $299 million, an increase of $29 million over March 31, 2011, reflective of higher unresolved repurchase requests. The mortgage servicing portfolio was $162.9 billion at the end of the second quarter.

All other noninterest income categories increased on a sequential quarter basis, including service charges on deposit accounts, which reversed a declining trend from the past three quarters. Compared to the second quarter of 2010, trust income, retail investment income, and card fees all increased, while service charges on deposits declined 18% due to regulatory-induced product changes that became effective in the third quarter of 2010.

For the six months ended June 30th, noninterest income was $1,795 million in 2011 and $1,650 million in 2010. The $145 million, or 9%, increase over the prior year was driven by growth across most consumer and commercial fee categories, including investment banking, card fees, retail investment services, and trust income. Higher gains on the sale of investment securities also contributed to the growth, which was partially offset by a decline in service charge income.

Noninterest Expense

Noninterest expense was $1,542 million in the current quarter compared with $1,465 million in the prior quarter and $1,503 million in the prior year quarter. The $77 million, or 5%, increase on a sequential quarter basis was largely driven by a $37 million increase in credit-related expenses, attributable to legal and compliance accruals. The FDIC insurance assessment increased $10 million due to a change in the assessment methodology. Personnel-related expenses declined 1% due to seasonal declines in employee benefits, partially offset by higher incentive compensation.

The $39 million, or 3%, increase in noninterest expenses over the second quarter of 2010 was largely driven by a $66 million increase in employee compensation. This was attributable to a 3% increase in personnel – primarily in client service and loss mitigation positions - and higher incentive compensation related to improved business performance. FDIC insurance premiums increased $16 million due to the change in the assessment methodology. Additionally, credit-related expenses increased $15 million as higher legal and compliance costs were partially offset by a decline in other real estate expenses. The second quarter of 2010 also included $63 million of losses related to the extinguishment of debt.

For the six months ended June 30th, noninterest expense was $3,007 million in 2011 and $2,864 million in 2010. The 5% increase was attributable to higher personnel-related expenses, credit-related expenses, and FDIC insurance premiums, partially offset by lower losses on the extinguishment of debt.

 

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Income Taxes

In the second quarter of 2011, the Company recorded a provision for income taxes of $58 million compared with a provision of $33 million in the prior quarter and a $50 million benefit in the second quarter of 2010. The effective tax rate in the current quarter increased to 24.5% and was impacted by the recognition of specific discrete items.

U.S. Treasury Preferred Dividends

The Company formerly paid dividends to the U.S. Treasury on its $4.85 billion of TARP preferred securities. The Company redeemed these shares at the end of the first quarter of 2011, and, therefore, did not pay such dividends in the second quarter of 2011. The first quarter of 2011 included $66 million of preferred dividends paid to the U.S. Treasury, as well as a $74 million non-cash charge associated with the redemption of the TARP preferred shares. The second quarter of 2010 included $66 million of preferred dividends paid to the U.S. Treasury.

Balance Sheet

As of June 30, 2011, SunTrust had total assets of $172.3 billion and shareholders’ equity of $19.7 billion, representing 11.4% of total assets. Book and tangible book value per common share were $36.30 and $24.57, respectively, as of June 30, 2011, up 2% and 3%, respectively, from the prior quarter.

Loans

Average loans for the current quarter were $114.9 billion, compared with average balances of $115.2 billion and $113.0 billion during the first quarter of 2011 and the second quarter of 2010, respectively. While average balances were relatively flat on a sequential quarter basis, commercial & industrial loans increased $1.0 billion, or 2%, while higher-risk categories such as commercial construction and certain other residential real estate-related loans continued to decline. The $1.9 billion, or 2%, average balance increase over the second quarter of 2010 was driven by the acquisition of auto and student loans, as well as from organic growth in commercial & industrial loans and government-guaranteed residential mortgage loans. The risk profile of the loan portfolio continued to improve during the past year; in addition to higher-risk loan categories declining meaningfully, approximately 8% of the Company’s loan portfolio was comprised of government-guaranteed loans as of June 30, 2011, compared to approximately 6% as of June 30, 2010.

Deposits

Average consumer and commercial deposits in the second quarter of 2011 were $121.9 billion, compared to average balances of $120.7 billion and $116.5 billion in the prior quarter and prior year quarter, respectively. The favorable shift in the deposit mix continued during the current quarter, as the sequential increase of $1.2 billion, or 1%, was concentrated in demand deposits, while time deposits declined by $0.3 billion, or 1%.

Compared to the second quarter of 2010, average consumer and commercial deposits increased $5.4 billion, or 5%. Average lower-cost deposit products increased a combined $9.7 billion, or 11%, while time deposits declined $4.3 billion, or 18%. While changing client preferences and the economic environment have contributed to this favorable shift in deposit mix, SunTrust also attributes the lower-cost deposit growth to its investments in enhancing the client experience and its marketing initiatives.

 

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Capital and Liquidity

The Company’s estimated capital ratios are well above regulatory requirements, as well as the proposed guidelines recently published by the Basel Committee and endorsed by U.S. regulatory agencies. The Tier 1 capital and Tier 1 common ratios were estimated to have expanded to 11.10% and 9.20%, respectively, and the tangible equity to tangible assets ratio increased to 8.07% as of June 30, 2011. The Company also has substantial available liquidity, as client deposits have been retained in cash and high-quality government-backed securities.

Asset Quality

Asset quality improved during the quarter, with continued trends of declining net charge-offs, nonperforming loans, and other real estate that began in early 2010. Early stage delinquencies also continued to decline on a sequential quarter basis.

Net charge-offs were $505 million in the current quarter compared to $571 million in the prior quarter and $722 million in the prior year quarter. The $66 million sequential quarter decline was concentrated in residential mortgage loans and was partially offset by a slight increase in commercial & industrial loans. Compared to the second quarter of 2010, net charge-offs decreased $217 million, or 30%, with declines across all loan segments, particularly residential loans. The ratio of annualized net charge-offs to total average loans was 1.76% in the current quarter and declined 25 basis points and 81 basis points from the prior quarter and the prior year quarter, respectively. The provision for credit losses was $392 million in the second quarter of 2011, a decline of $55 million and $270 million compared to the prior quarter and the second quarter of 2010, respectively.

Nonperforming loans totaled $3.6 billion as of June 30, 2011, a decline of $361 million, or 9%, from the prior quarter. This marks the eighth consecutive quarter of declining nonperforming loans. The sequential quarter decline was primarily driven by reductions in commercial construction loans; however, declines were also prevalent in other loan categories. Compared to June 30, 2010, nonperforming loans were down $1.1 billion, or 23%. The decline was driven primarily by reductions in the commercial construction, residential mortgage, commercial & industrial, and residential construction loan categories. As of June 30, 2011, nonperforming loans represented 3.14% of total loans, down 32 basis points from the prior quarter and down 102 basis points from June 30, 2010. Other real estate owned totaled $483 million as of the end of the quarter, down $217 million, or 31%, since June 30, 2010.

Early stage delinquencies declined to 1.09%, an improvement of 6 basis points from the end of the prior quarter. Excluding government-guaranteed student loans and Ginnie Mae insured repurchased mortgage loans, early stage delinquencies were 0.73%, a decline of 7 basis points from March 31, 2011.

As of June 30, 2011, the allowance for loan losses was $2.7 billion representing 2.40% of total loans, down 9 basis points from March 31, 2011. The allowance for loan losses declined $110 million during the current quarter as a result of the improvement in asset quality.

Accruing restructured loans totaled $2.7 billion and nonaccruing restructured loans totaled $0.9 billion as of June 30, 2011. Both were relatively stable compared to the prior quarter end. $3.1 billion of restructured loans related to residential mortgages, while $0.5 billion were commercial loans.

 

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LINE OF BUSINESS FINANCIAL PERFORMANCE

Line of Business Results

The Company has included line of business financial tables as part of this release on its website at www.suntrust.com in the Investor Relations section located under “About SunTrust.” The Company’s business segments are: Retail Banking, Diversified Commercial Banking, Corporate and Investment Banking, Mortgage, Wealth and Investment Management, and Commercial Real Estate. All revenue in the line of business tables is reported on a fully taxable-equivalent basis. For the lines of business, results include net interest income, which is computed using matched-maturity funds transfer pricing. Further, provision for loan losses is represented by net charge-offs. SunTrust also reports results for Corporate Other and Treasury, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Corporate Other and Treasury segment also includes differences created between internal management accounting practices and generally accepted accounting principles, certain matched-maturity funds transfer pricing credits and charges, differences in provision for loan losses compared to net charge-offs, as well as equity and its related impact. A detailed discussion of the line of business results will be included in the Company’s forthcoming quarterly report on Form 10-Q.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust’s earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published today and SunTrust’s forthcoming quarterly report on Form 10-Q. Detailed financial tables and other information are also available on the Company’s website at www.suntrust.com in the Investor Relations section located under “About SunTrust.” This information is also included in a current report on Form 8-K furnished with the Securities and Exchange Commission today.

Conference Call

SunTrust management will host a conference call on July 22, 2011, at 8:00 a.m. (Eastern Daylight Time) to discuss the earnings results and business trends. Individuals may call in beginning at 7:45 a.m. (Eastern Daylight Time) by dialing 1-888-972-7805 (Passcode: 2Q11). Individuals calling from outside the United States should dial 1-517-308-9091 (Passcode: 2Q11). A replay of the call will be available approximately one hour after the call ends on July 22, 2011, and will remain available until August 5, 2011, by dialing 1-866-352-7718 (domestic) or 1-203-369-0076 (international).

Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at www.suntrust.com/investorrelations. Beginning the afternoon of July 22, 2011, listeners may access an archived version of the webcast in the “Webcasts and Presentations” subsection found on the investor relations webpage. This webcast will be archived and available for one year. A link to the Investor Relations page is also found in the footer of the SunTrust home page.

SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation’s largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. The Company operates an extensive branch and ATM network throughout the Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, and trust and investment management services. Through various subsidiaries, the Company provides mortgage banking, insurance, brokerage, equipment leasing, and capital markets services. SunTrust’s Internet address is www.suntrust.com.

 

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Important Cautionary Statement About Forward-Looking Statements

This news release includes non-GAAP financial measures to describe SunTrust’s performance. The reconciliations of those measures to GAAP measures are provided within or in the appendix to this news release. In this news release, the Company presents net interest income and net interest margin on a fully taxable-equivalent (“FTE”) basis, and ratios on an 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.

This news release contains forward-looking statements. The statement regarding our expectations about expected earnings increases as a result of business initiatives is a forward looking statements. Also, any statement that does not describe historical or current facts, is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2011, and in other periodic reports that we file with the SEC. Those factors include: difficult market conditions have adversely affected our industry; concerns over market volatility continue; the Dodd-Frank Act makes fundamental changes in the regulation of the financial services industry, some of which may adversely affect our business; we are subject to capital adequacy and liquidity guidelines and, if we fail to meet these guidelines, our financial condition would be adversely affected; emergency measures designed to stabilize the U.S. banking system are beginning to wind down; we are subject to credit risk; our ALLL may not be adequate to cover our eventual losses; we will realize future losses if the proceeds we receive upon liquidation of nonperforming assets are less than the carrying value of such assets; weakness in the economy and in the real estate market, including specific weakness within our geographic footprint, has adversely affected us and may continue to adversely affect us; weakness in the real estate market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to adversely affect us; we are subject to certain risks related to originating and selling mortgages. We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations, and financial condition; we are subject to risks related to delays in the foreclosure process; we may continue to suffer increased losses in our loan portfolio despite enhancement of our underwriting policies; as a financial services company, adverse changes in general business or economic conditions could have a material adverse effect on our financial condition and results of operations. Changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital or liquidity; the fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings; depressed market values for our stock may require us to write down goodwill; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; consumers may decide not to use banks to complete their financial transactions, which could affect net income; we have businesses other than banking which subject us to a variety of risks; hurricanes and other natural or man-made disasters may adversely affect loan portfolios and operations and increase the cost of doing business; negative public opinion could damage our reputation and adversely impact business and revenues; the soundness of other financial institutions could adversely affect

 

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us; we rely on other companies to provide key components of our business infrastructure; we rely on our systems, employees, and certain counterparties, and certain failures could materially adversely affect our operations; we depend on the accuracy and completeness of information about clients and counterparties; regulation by federal and state agencies could adversely affect the business, revenue, and profit margins; competition in the financial services industry is intense and could result in losing business or margin declines; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we may not pay dividends on your common stock; disruptions in our ability to access global capital markets may negatively affect our capital resources and liquidity; any reduction in our credit rating could increase the cost of our funding from the capital markets; we have in the past and may in the future pursue acquisitions, which could affect costs and from which we may not be able to realize anticipated benefits; we are subject to certain litigation, and our expenses related to this litigation may adversely affect our results; we depend on the expertise of key personnel. If these individuals leave or change their roles without effective replacements, operations may suffer; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase costs and reduce profitability and may adversely impact our ability to implement our business strategies; our accounting policies and processes are critical to how we report our financial condition and results of operations. They require management to make estimates about matters that are uncertain; changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition; our stock price can be volatile; our disclosure controls and procedures may not prevent or detect all errors or acts of fraud; our financial instruments carried at fair value expose us to certain market risks; our revenues derived from our investment securities may be volatile and subject to a variety of risks; and we may enter into transactions with off-balance sheet affiliates or our subsidiaries.

 

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SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

(Dollars in millions, except per share data) (Unaudited)

 

     Three Months Ended
June 30
    %     Six Months Ended
June 30
    %  
     2011     2010     Change 5     2011     2010     Change 5  

EARNINGS & DIVIDENDS

            

Net income/(loss)

     $178         $12         NM      $358         ($149)        NM 

Net income/(loss) available to common shareholders

     174         (56)        NM         212         (285)        NM    

Total revenue - FTE 1, 2

     2,198         2,160                4,358         4,060           

Total revenue - FTE excluding securities gains, net 1, 2

     2,166         2,103                4,262         4,002           

Net income/(loss) per average common share

            

Diluted 4

     0.33         (0.11)        NM         0.41         (0.58)        NM    

Diluted excluding effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury 1, 4

     0.33         (0.11)        NM         0.55         (0.58)        NM    

Basic

     0.33         (0.11)        NM         0.41         (0.58)        NM    

Dividends paid per common share

     0.01         0.01                0.02         0.02           

CONDENSED BALANCE SHEETS

            

Selected Average Balances

            

Total assets

     $170,527         $171,273             $171,789         $171,351        

Earning assets

     145,985         145,464                146,383         146,176           

Loans

     114,920         113,016                115,040         113,721           

Consumer and commercial deposits

     121,879         116,460                121,298         115,776           

Brokered and foreign deposits

     2,340         2,670         (12)        2,472         3,049         (19)   

Total shareholders’ equity

     19,509         22,313         (13)        21,298         22,326         (5)   

As of

            

Total assets

     172,173         170,668                 

Earning assets

     146,367         145,601                 

Loans

     114,913         112,925                 

Allowance for loan and lease losses

     2,744         3,156         (13)         

Consumer and commercial deposits

     121,671         116,261                 

Brokered and foreign deposits

     3,250         2,407         35          

Total shareholders’ equity

     19,660         23,024         (15)         

FINANCIAL RATIOS & OTHER DATA

            

Return on average total assets

     0.42      0.03      NM      0.42      (0.17)  %      NM 

Return on average assets less net unrealized securities gains 1

     0.35         (0.08)        NM         0.33         (0.25)        NM    

Return on average common shareholders’ equity

     3.61         (1.29)        NM         2.28         (3.31)        NM    

Return on average realized common shareholders’ equity 1

     3.21         (2.53)        NM         1.49         (4.23)        NM    

Net interest margin 2

     3.53         3.33                3.53         3.32           

Efficiency ratio 2

     70.17         69.57                69.01         70.52         (2)   

Tangible efficiency ratio 1, 2

     69.64         68.96                68.49         69.87         (2)   

Effective tax rate/(benefit)

     24.45         (133.13)        NM         20.21         (62.17)        NM    

Tier 1 common equity

     9.20  3      7.92         16          

Tier 1 capital

     11.10  3      13.51         (18)         

Total capital

     14.00  3      16.96         (17)         

Tier 1 leverage

     8.92  3      10.94         (18)         

Total average shareholders’ equity to total average assets

     11.44         13.03         (12)        12.40         13.03         (5)   

Tangible equity to tangible assets 1

     8.07         10.18         (21)         

Book value per common share

     $36.30         $36.19                 

Tangible book value per common share 1

     24.57         23.58                 

Market price:

            

High

     30.13         31.92         (6)        33.14         31.92           

Low

     24.63         23.12                24.63         20.16         22    

Close

     25.80         23.30         11         25.80         23.30         11    

Market capitalization

     13,852         11,648         19          

Average common shares outstanding (000s)

            

Diluted

     535,416         498,499                519,548         498,369           

Basic

     531,792         495,351                515,819         495,112           

Full-time equivalent employees

     29,235         28,250                 

Number of ATMs

     2,919         2,902                 

Full service banking offices

     1,661         1,675         (1)         

 

 

1 

See Appendix A for reconcilements of non-GAAP performance measures.

2 

Total revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent (“FTE”) basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.

3 

Current period tier 1 common equity, tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.

4 

For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

5 

“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 1


 

SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER FINANCIAL HIGHLIGHTS

 

(Dollars in millions, except per share data) (Unaudited)

 
    Three Months Ended  
        June 30    
2011
        March 31    
2011
        December 31    
2010
        September 30    
2010
        June 30    
2010
 

EARNINGS & DIVIDENDS

         

Net income

    $178         $180         $185         $153         $12    

Net income/(loss) available to common shareholders

    174         38         114         84         (56)   

Total revenue - FTE 1, 2

    2,198         2,160         2,326         2,313         2,160    

Total revenue - FTE excluding securities gains, net 1, 2

    2,166         2,096         2,262         2,244         2,103    

Net income/(loss) per average common share

         

Diluted 4

    0.33         0.08         0.23         0.17         (0.11)   

Diluted excluding effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury 1, 4

    0.33         0.22         0.23         0.17         (0.11)   

Basic

    0.33         0.08         0.23         0.17         (0.11)   

Dividends paid per common share

    0.01         0.01         0.01         0.01         0.01    

CONDENSED BALANCE SHEETS

         

 

Selected Average Balances

         

Total assets

    $170,527         $173,066         $174,768         $171,999         $171,273    

Earning assets

    145,985         146,786         149,114         147,249         145,464    

Loans

    114,920         115,162         114,930         113,322         113,016    

Consumer and commercial deposits

    121,879         120,710         119,688         117,233         116,460    

Brokered and foreign deposits

    2,340         2,606         2,827         2,740         2,670    

Total shareholders’ equity

    19,509         23,107         23,576         23,091         22,313    

As of

         

Total assets

    172,173         170,794         172,874         174,703         170,668    

Earning assets

    146,367         145,895         148,473         149,994         145,601    

Loans

    114,913         114,932         115,975         115,055         112,925    

Allowance for loan and lease losses

    2,744         2,854         2,974         3,086         3,156    

Consumer and commercial deposits

    121,671         121,559         120,025         117,494         116,261    

Brokered and foreign deposits

    3,250         2,426         3,019         2,850         2,407    

Total shareholders’ equity

    19,660         19,223         23,130         23,438         23,024    

FINANCIAL RATIOS & OTHER DATA

         

Return on average total assets

    0.42    %      0.42    %      0.42    %      0.35    %      0.03    % 

Return on average assets less net unrealized securities gains 1

    0.35         0.30         0.31         0.23         (0.08)   

Return on average common shareholders’ equity

    3.61         0.84         2.44         1.83         (1.29)   

Return on average realized common shareholders’ equity 1

    3.21         (0.35)        1.53         0.70         (2.53)   

Net interest margin 2

    3.53         3.53         3.44         3.41         3.33    

Efficiency ratio 2

    70.17         67.83         66.57         64.80         69.57    

Tangible efficiency ratio 1, 2

    69.64         67.32         66.07         64.24         68.96    

Effective tax rate/(benefit)

    24.45         15.54         19.66         8.25         (133.13)   

Tier 1 common equity

    9.20    3      9.05         8.08         8.02         7.92    

Tier 1 capital

    11.10    3      11.00         13.67         13.58         13.51    

Total capital

    14.00    3      13.92         16.54         16.42         16.96    

Tier 1 leverage

    8.92    3      8.72         10.94         11.03         10.94    

Total average shareholders’ equity to total average assets

    11.44         13.35         13.49         13.42         13.03    

Tangible equity to tangible assets 1

    8.07         7.87         10.12         10.19         10.18    

Book value per common share

    $36.30         $35.49         $36.34         $37.01         $36.19    

Tangible book value per common share 1

    24.57         23.79         23.76         24.42         23.58    

Market price:

         

   High

    30.13         33.14         29.82         27.05         31.92    

   Low

    24.63         27.38         23.25         21.79         23.12    

   Close

    25.80         28.84         29.51         25.83         23.30    

Market capitalization

    13,852         15,482         14,768         12,914         11,648    

Average common shares outstanding (000s)

         

   Diluted

    535,416         503,503         499,423         498,802         498,499    

   Basic

    531,792         499,669         495,710         495,501         495,351    

Full-time equivalent employees

    29,235         29,052         29,056         28,599         28,250    

Number of ATMs

    2,919         2,924         2,918         2,928         2,902    

Full service banking offices

    1,661         1,665         1,668         1,670         1,675    

 

 

1See Appendix A for reconcilements of non-GAAP performance measures.

2Total revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent (“FTE”) basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.

3Current period tier 1 common equity, tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.

4For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

 

Page 2


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME/(LOSS)

(Dollars in millions, except per share data) (Unaudited)

 

 

         Three Months Ended              Increase/(Decrease) 3             Six Months Ended              Increase/(Decrease) 3      
    

 

June 30

      

 

June 30

    
    

 

2011

     2010      Amount      %     2011      2010      Amount      %  

Interest income

     $1,546          $1,570          ($24)         (2)   %      $3,100          $3,144          ($44)         (1)   % 

Interest expense

     287          392          (105)         (27)        592          794          (202)         (25)   
                                              

NET INTEREST INCOME

     1,259          1,178          81                 2,508          2,350          158            

Provision for credit losses

     392          662          (270)         (41)        839          1,524          (685)         (45)   
                                              

NET INTEREST INCOME AFTER

 PROVISION FOR CREDIT LOSSES

     867          516          351          68         1,669          826          843          NM    
                                              

NONINTEREST INCOME

                      

Service charges on deposit accounts

     170          208          (38)         (18)        333          404          (71)         (18)   

Trust and investment management income

     135          127                         270          249          21            

Retail investment services

     59          48          11          23         117          95          22          23    

Other charges and fees

     130          133          (3)         (2)        256          262          (6)         (2)   

Investment banking income

     95          58          37          64         162          114          48          42    

Trading account profits and commissions

     53          109          (56)         (51)        105          102                    

Card fees

     105          94          11          12         205          181          24          13    

Mortgage production related income/(loss)

             (16)         20          NM                 (47)         50          NM    

Mortgage servicing related income

     72          88          (16)         (18)        144          158          (14)         (9)   

Other noninterest income

     57          46          11          24         104          74          30          41    

Securities gains, net

     32          57          (25)         (44)        96          58          38          66    
                                              

Total noninterest income

     912          952          (40)         (4)        1,795          1,650          145            
                                              

NONINTEREST EXPENSE

                      

Employee compensation and benefits

     748          682          66          10         1,502          1,374          128            

Net occupancy expense

     89          90          (1)         (1)        178          181          (3)         (2)   

Outside processing and software

     162          158                         320          307          13            

Equipment expense

     44          42                         88          83                    

Marketing and customer development

     46          44                         84          78                    

Amortization of intangible assets

     12          13          (1)         (8)        23          26          (3)         (12)   

Net loss/(gain) on extinguishment of debt

     (1)         63          (64)         NM         (2)         54          (56)         NM    

Operating losses

     62          16          46          NM         89          30          59          NM    

FDIC premium/regulatory exams

     81          65          16          25         152          129          23          18    

Other noninterest expense

     299          330          (31)         (9)        573          602          (29)         (5)   
                                              

Total noninterest expense

     1,542          1,503          39                 3,007          2,864          143            
                                              

INCOME/(LOSS) BEFORE PROVISION/(BENEFIT) FOR INCOME TAXES

     237          (35)         272          NM         457          (388)         845          NM    

Provision/(benefit) for income taxes

     58          (50)         108          NM         91          (244)         335          NM    
                                              

INCOME/(LOSS) INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

     179          15          164          NM         366          (144)         510          NM    

Net income attributable to noncontrolling interest

                     (2)         (67)                                60    
                                              

NET INCOME/(LOSS)

     $178          $12          $166          NM      $358          ($149)         $507          NM   % 
                                              

NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS

     $174          ($56)         $230          NM      $212          ($285)         $497          NM   % 

Net interest income - FTE 1

     1,286          1,208          78                 2,563          2,410          153            

Net income/(loss) per average common share

                      

  Diluted 2

     0.33          (0.11)         0.44          NM         0.41          (0.58)         0.99          NM    

  Basic

     0.33          (0.11)         0.44          NM         0.41          (0.58)         0.99          NM    

Cash dividends paid per common share

     0.01          0.01                         0.02          0.02                    

Average common shares outstanding (000s)

                      

  Diluted

     535,416          498,499          36,917                 519,548          498,369          21,179            

  Basic

     531,792          495,351          36,441                 515,819          495,112          20,707            

 

 

1Net interest income includes the effects of FTE 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. See Appendix A for a reconcilement of this non-GAAP measure to the related GAAP measure.

2For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

3“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 3


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME/(LOSS)

(Dollars in millions, except per share data) (Unaudited)

 

 

 

        Three Months Ended                   Three Months Ended      
        June 30             March 31             Increase/(Decrease)3             December 31             September 30             June 30      
        2011             2011             Amount             %             2010             2010             2010      

Interest income

    $1,546         $1,554         ($8)        (1)  %      $1,595         $1,604         $1,570    

Interest expense

    287         305         (18)        (6)        329         366         392    
                                           

NET INTEREST INCOME

    1,259         1,249         10                1,266         1,238         1,178    

Provision for credit losses

    392         447         (55)        (12)        512         615         662    
                                           

NET INTEREST INCOME AFTER

  PROVISION FOR CREDIT LOSSES

    867         802         65                754         623         516    
                                           

NONINTEREST INCOME

             

Service charges on deposit accounts

    170         163                       172         184         208    

Trust and investment management income

    135         135                       130         124         127    

Retail investment services

    59         58                       57         52         48    

Other charges and fees

    130         126                       135         137         133    

Investment banking income

    95         67         28         42         103         96         58    

Trading account profits/(losses) and commissions

    53         52                       93         (22)        109    

Card fees

    105         100                       99         96         94    

Mortgage production related income/(loss)

           (1)               NM         41         133         (16)   

Mortgage servicing related income

    72         72                       68         132         88    

Other noninterest income

    57         47         10         21         70         46         46    

Securities gains, net

    32         64         (32)        (50)        64         69         57    
                                           

Total noninterest income

    912         883         29                1,032         1,047         952    
                                           

NONINTEREST EXPENSE

             

Employee compensation and benefits

    748         754         (6)        (1)        738         709         682    

Net occupancy expense

    89         89                       88         92         90    

Outside processing and software

    162         158                       174         157         158    

Equipment expense

    44         44                       46         45         42    

Marketing and customer development

    46         38                21         56         43         44    

Amortization of intangible assets

    12         11                       12         13         13    

Net loss/(gain) on extinguishment of debt

    (1)        (1)                             12         63    

Operating losses

    62         27         35         NM         26         27         16    

FDIC premium/regulatory exams

    81         71         10         14         69         67         65    

Other noninterest expense

    299         274         25                335         334         330    
                                           

Total noninterest expense

    1,542         1,465         77                1,548         1,499         1,503    
                                           

INCOME/(LOSS) BEFORE PROVISION/(BENEFIT) FOR INCOME TAXES

    237         220         17                238         171         (35)   

Provision/(benefit) for income taxes

    58         33         25         76         45         14         (50)   
                                           

INCOME INCLUDING INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST

    179         187         (8)        (4)        193         157         15    

Net income attributable to noncontrolling interest

                  (6)        (86)                        
                                           

NET INCOME

    $178         $180         ($2)        (1)  %      $185         $153         $12    
                                           

NET INCOME/(LOSS) AVAILABLE TO COMMON
SHAREHOLDERS

    $174         $38         $136         NM      $114         $84         ($56)   

Net interest income - FTE1

    1,286         1,277                       1,294         1,266         1,208    

Net income/(loss) per average common share

             

  Diluted2

    0.33         0.08         0.25         NM         0.23         0.17         (0.11)   

  Basic

    0.33         0.08         0.25         NM         0.23         0.17         (0.11)   

Cash dividends paid per common share

    0.01         0.01                       0.01         0.01         0.01    

Average common shares outstanding (000s)

             

  Diluted

    535,416         503,503         31,913                499,423         498,802         498,499    

  Basic

    531,792         499,669         32,123                495,710         495,501         495,351    

 

 

1 Net interest income includes the effects of FTE 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. See Appendix A for a reconcilement of this non-GAAP measure to the related GAAP measure.

2 For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

3“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 4


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Dollars in millions and shares in thousands) (Unaudited)

 

 

$172,173 $172,173 $172,173 $172,173
    As of June 30         Increase/(Decrease)      
            2011                     2010                     Amount                     %2          

ASSETS

       

Cash and due from banks

    $5,633          $3,836          $1,797         47   %   

Interest-bearing deposits in other banks

    20          24          (4)        (17)        

Funds sold and securities purchased under agreements to resell

    1,134          933          201         22         

Trading assets

    6,586          6,166          420         7         

Securities available for sale

    27,216          27,598          (382)        (1)        

Loans held for sale

    2,052          3,185          (1,133)        (36)        

Loans held for investment:

       

Commercial & industrial

    45,922          43,982          1,940         4         

Commercial real estate

    5,707          6,814          (1,107)        (16)        

Commercial construction

    1,740          3,653          (1,913)        (52)        

Residential mortgages - guaranteed

    4,513          2,894          1,619         56         

Residential mortgages - nonguaranteed

    23,224          24,457          (1,233)        (5)        

Residential home equity products

    16,169          17,144          (975)        (6)        

Residential construction

    1,118          1,526          (408)        (27)        

Consumer student loans - guaranteed

    4,620          3,305          1,315         40         

Consumer other direct

    1,863          1,555          308         20         

Consumer indirect

    9,630          7,100          2,530         36         

Consumer credit cards

    407          495          (88)        (18)        
                   

    Total loans held for investment

    114,913          112,925          1,988         2         

Allowance for loan and lease losses

    (2,744)         (3,156)         (412)        (13)        
                   

  Net loans held for investment

    112,169          109,769          2,400         2         

Goodwill

    6,343          6,323          20         -          

Other intangible assets

    1,539          1,443          96         7         

Other real estate owned

    483          700          (217)        (31)        

Other assets

    8,998          10,691          (1,693)        (16)        
                   

Total assets 1

    $172,173          $170,668          $1,505         1   %   
                   

LIABILITIES

       

Deposits:

       

Noninterest-bearing consumer and commercial deposits

    $30,591          $25,382          $5,209         21   %   

Interest-bearing consumer and commercial deposits:

       

NOW accounts

    24,330          24,487          (157)        (1)        

Money market accounts

    42,427          38,444          3,983         10         

Savings

    4,600          4,107          493         12         

Consumer time

    12,598          14,665          (2,067)        (14)        

Other time

    7,125          9,176          (2,051)        (22)        
                   

  Total consumer and commercial deposits

    121,671          116,261          5,410         5         

Brokered deposits

    2,345          2,343                 -          

Foreign deposits

    905          64          841         NM         
                   

    Total deposits

    124,921          118,668          6,253         5         

Funds purchased

    939          1,260          (321)        (25)        

Securities sold under agreements to repurchase

    2,253          2,477          (224)        (9)        

Other short-term borrowings

    2,791          2,517          274         11         

Long-term debt

    13,693          15,659          (1,966)        (13)        

Trading liabilities

    3,026          2,655          371         14         

Other liabilities

    4,890          4,408          482         11         
                   

Total liabilities

    152,513          147,644          4,869         3         
                   

SHAREHOLDERS’ EQUITY

       

Preferred stock, no par value

    172          4,929          (4,757)        (97)        

Common stock, $1.00 par value

    550          515          35         7         

Additional paid in capital

    9,330          8,445          885         10         

Retained earnings

    8,745          8,358          387         5         

Treasury stock, at cost, and other

    (805)         (968)         (163)        (17)        

Accumulated other comprehensive income

    1,668          1,745          (77)        (4)        
                   

Total shareholders’ equity

    19,660          23,024          (3,364)        (15)        
                   
                         
                   

Total liabilities and shareholders’ equity

    $172,173          $170,668          $1,505         1   %   
                   

Common shares outstanding

    536,907          499,929          36,978         7   %   

Common shares authorized

    750,000          750,000          -          -         

Preferred shares outstanding

    2          50          (48)        (96)        

Preferred shares authorized

    50,000          50,000          -          -         

Treasury shares of common stock

    13,014          14,738          (1,724)        (12)        
   
   

1 Includes earning assets of

    $146,367          $145,601          $766         1   %   
2“NM”

- Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 5


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER CONSOLIDATED BALANCE SHEETS

(Dollars in millions and shares in thousands) (Unaudited)

 
    As of           As of  
    June 30     March 31     Increase/(Decrease)     December 31     September 30     June 30  
        2011             2011             Amount              %2             2010             2010             2010      

ASSETS

             

Cash and due from banks

    $5,633         $5,216         $417             $4,296         $3,169         $3,836    

Interest-bearing deposits in other banks

    20         20                       24         25         24    

Funds sold and securities purchased under agreements to resell

    1,134         981         153         16         1,058         962         933    

Trading assets

    6,586         6,289         297                6,175         6,650         6,166    

Securities available for sale

    27,216         26,569         647                26,895         30,310         27,598    

Loans held for sale

    2,052         2,165         (113)        (5)        3,501         3,114         3,185    

Loans held for investment:

             

Commercial & industrial

    45,922         45,080         842                44,753         44,374         43,982    

Commercial real estate

    5,707         6,043         (336)        (6)        6,167         6,616         6,814    

Commercial construction

    1,740         2,109         (369)        (17)        2,568         3,052         3,653    

Residential mortgages - guaranteed

    4,513         4,516         (3)               4,520         4,090         2,894    

Residential mortgages - nonguaranteed

    23,224         23,443         (219)        (1)        23,959         24,124         24,457    

Residential home equity products

    16,169         16,382         (213)        (1)        16,751         16,913         17,144    

Residential construction

    1,118         1,208         (90)        (7)        1,291         1,413         1,526    

Consumer student loans - guaranteed

    4,620         4,477         143                4,260         4,044         3,305    

Consumer other direct

    1,863         1,786         77                1,722         1,636         1,555    

Consumer indirect

    9,630         9,469         161                9,499         8,310         7,100    

Consumer credit cards

    407         419         (12)        (3)        485         483         495    
                                           

Total loans held for investment

    114,913         114,932         (19)               115,975         115,055         112,925    

   Allowance for loan and lease losses

    (2,744)        (2,854)        (110)        (4)        (2,974)        (3,086)        (3,156)   
                                           

Net loans held for investment

    112,169         112,078         91                113,001         111,969         109,769    

Goodwill

    6,343         6,324         19                6,323         6,323         6,323    

Other intangible assets

    1,539         1,659         (120)        (7)        1,571         1,204         1,443    

Other real estate owned

    483         534         (51)        (10)        596         645         700    

Other assets

    8,998         8,959         39                9,434         10,332         10,691    
                                           

Total assets 1

    $172,173         $170,794         $1,379             $172,874         $174,703         $170,668    
                                           

LIABILITIES

             

Deposits:

             

   Noninterest-bearing consumer and commercial deposits

    $30,591         $28,521         $2,070             $27,290         $26,707         $25,382    

   Interest-bearing consumer and commercial deposits:

             

NOW accounts

    24,330         25,462         (1,132)        (4)        26,115         23,444         24,487    

Money market accounts

    42,427         43,055         (628)        (1)        42,005         40,798         38,444    

Savings

    4,600         4,518         82                4,094         4,051         4,107    

Consumer time

    12,598         12,747         (149)        (1)        12,879         13,966         14,665    

Other time

    7,125         7,256         (131)        (2)        7,642         8,528         9,176    
                                           

Total consumer and commercial deposits

    121,671         121,559         112                120,025         117,494         116,261    

   Brokered deposits

    2,345         2,369         (24)        (1)        2,365         2,409         2,343    

   Foreign deposits

    905         57         848         NM         654         441         64    
                                           

   Total deposits

    124,921         123,985         936                123,044         120,344         118,668    

Funds purchased

    939         1,150         (211)        (18)        951         1,076         1,260    

Securities sold under agreements to repurchase

    2,253         2,113         140                2,180         2,429         2,477    

Other short-term borrowings

    2,791         2,858         (67)        (2)        2,690         4,894         2,517    

Long-term debt

    13,693         14,663         (970)        (7)        13,648         15,208         15,659    

Trading liabilities

    3,026         2,731         295         11         2,678         2,702         2,655    

Other liabilities

    4,890         4,071         819         20         4,553         4,612         4,408    
                                           

   Total liabilities

    152,513         151,571         942                149,744         151,265         147,644    
                                           

SHAREHOLDERS’ EQUITY

             

Preferred stock, no par value

    172         172                       4,942         4,936         4,929    

Common stock, $1.00 par value

    550         550                       515         515         515    

Additional paid in capital

    9,330         9,324                       8,403         8,443         8,445    

Retained earnings

    8,745         8,575         170                8,542         8,431         8,358    

Treasury stock, at cost, and other

    (805)        (823)        (18)        (2)        (888)        (952)        (968)   

Accumulated other comprehensive income

    1,668         1,425         243         17         1,616         2,065         1,745    
                                           

   Total shareholders’ equity

    19,660         19,223         437                23,130         23,438         23,024    
                                           
                                           

   Total liabilities and shareholders’ equity

    $172,173         $170,794         $1,379             $172,874         $174,703         $170,668    
                                           

Common shares outstanding

    536,907         536,817         90             500,436         499,955         499,929    

Common shares authorized

    750,000         750,000                       750,000         750,000         750,000    

Preferred shares outstanding

                                50         50         50    

Preferred shares authorized

    50,000         50,000                       50,000         50,000         50,000    

Treasury shares of common stock

    13,014         13,104         (90)        (1)        14,231         14,712         14,738    

1Includes earning assets of

    $146,367         $145,895         $472             $148,473         $149,994         $145,601    

2 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 6


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID

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

 
     Three Months Ended     Increase/(Decrease) From  
     June 30, 2011     March 31, 2011     Sequential Quarter  
     Average
  Balances  
     Interest
Income/
  Expense  
      Yields/  
Rates
      Average  
Balances
     Interest
Income/
  Expense  
       Yields/  
Rates
      Average  
Balances
       Yields/  
Rates
 

ASSETS

                    

Loans (Post-Adoption):3

                    

Commercial and industrial - FTE 1

     $45,158          $583         5.17    %      $44,181          $583          5.35      $977          (0.18)   % 

Commercial real estate

     5,479          50         3.66         5,720          53          3.76         (241)         (0.10)   

Commercial construction

     1,204          11         3.83         1,466          14          3.80         (262)         0.03    

Residential mortgages - guaranteed

     4,387          39         3.57         4,305          35          3.26         82          0.31    

Residential mortgages -non guaranteed

     21,794          273         5.01         22,173          287          5.18         (379)         (0.17)   

Home equity products

     15,924          150         3.77         16,214          151          3.78         (290)         (0.01)   

Residential construction

     885          12         5.24         962          12          5.20         (77)         0.04    

Guaranteed student loans

     4,552          49         4.37         4,376          46          4.30         176          0.07    

Other direct

     1,823          22         4.79         1,741          22          5.01         82          (0.22)   

Indirect

     9,459          111         4.70         9,473          114          4.89         (14)         (0.19)   

Credit cards

     457          15         12.98         522          15          11.54         (65)         1.44    

Nonaccrual

     3,798          10         1.08         4,029                  0.77         (231)         0.31    
                                                                    

    Total loans

     114,920          1,325         4.62         115,162          1,340          4.72         (242)         (0.10)   

Securities available for sale:

                    

  Taxable

     23,711          199         3.35         23,705          185          3.12                 0.23    

  Tax-exempt - FTE 1

     517                 5.47         549                  5.54         (32)         (0.07)   
                                                                    

    Total securities available for sale - FTE 1

     24,228          206         3.40         24,254          192          3.17         (26)         0.23    

Funds sold and securities purchased under agreements to resell

     1,079                        1,064                  0.01         15          (0.01)   

Loans held for sale

     2,104          22         4.17         2,726          28          4.13         (622)         0.04    

Interest-bearing deposits

     23                 0.16         22                  0.13                 0.03    

Interest earning trading assets

     3,631          20         2.30         3,558          22          2.49         73          (0.19)   
                                                                    

    Total earning assets

     145,985          1,573         4.32         146,786          1,582          4.37         (801)         (0.05)   

Allowance for loan and lease losses

     (2,740)             (2,852)              112       

Cash and due from banks

     4,452              6,485               (2,033)      

Other assets

     17,348              17,699               (351)      

Noninterest earning trading assets

     2,999              2,654               345       

Unrealized gains on securities available for sale, net

     2,483              2,294               189       
                                      

    Total assets

     $170,527              $173,066               ($2,539)      
                                      

LIABILITIES AND SHAREHOLDERS’ EQUITY

                    

Interest-bearing deposits:

                    

  NOW accounts

     $24,672          $10         0.16      $25,370          $11          0.17      ($698)         (0.01)   % 

  Money market accounts

     42,865          43         0.40         42,603          48          0.46         262          (0.06)   

  Savings

     4,587                 0.18         4,266                  0.13         321          0.05    

  Consumer time

     12,712          51         1.60         12,774          51          1.61         (62)         (0.01)   

  Other time

     7,203          31         1.74         7,417          33          1.78         (214)         (0.04)   
                                                                    

    Total interest-bearing consumer and commercial deposits

     92,039          137         0.60         92,430          144          0.63         (391)         (0.03)   

  Brokered deposits

     2,317          25         4.38         2,347          25          4.36         (30)         0.02    

  Foreign deposits

     23                 0.05         259                  0.15         (236)         (0.10)   
                                                                    

    Total interest-bearing deposits

     94,379          162         0.69         95,036          169          0.72         (657)         (0.03)   

Funds purchased

     1,001                 0.12         1,114                  0.18         (113)         (0.06)   

Securities sold under agreements to repurchase

     2,264                 0.14         2,302                  0.16         (38)         (0.02)   

Interest-bearing trading liabilities

     922                 3.39         930                  3.34         (8)         0.05    

Other short-term borrowings

     2,934                 0.38         2,760                  0.41         174          (0.03)   

Long-term debt

     13,765          113         3.30         13,806          124          3.64         (41)         (0.34)   
                                                                    

    Total interest-bearing liabilities

     115,265          287         1.00         115,948          305          1.07         (683)         (0.07)   

Noninterest-bearing deposits

     29,840              28,280               1,560       

Other liabilities

     3,823              3,955               (132)      

Noninterest-bearing trading liabilities

     2,090              1,776               314       

Shareholders’ equity

     19,509              23,107               (3,598)      
                                      

    Total liabilities and shareholders’ equity

     $170,527              $173,066               ($2,539)      
                                      
                                      

Interest Rate Spread

          3.32    %            3.30   %         0.02    % 
                                      
                                

Net Interest Income - FTE 1

        $1,286              $1,277            
                                

Net Interest Margin 2

          3.53    %            3.53   %         -        % 
                                      

 

 

1 The fully taxable-equivalent(“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

2 The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

3 Average balances, interest income, and yields are presented using the new loan classifications as initially adopted in the Company’s 2010 Annual Report on Form 10-K. Due to the inability of the Company to present 2010 periods using the new classifications, the 2011 amounts have also been presented using prior loan classifications on the next page.

 

Page 7


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID, continued

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

 
    Three Months Ended     Increase/(Decrease) From  
    June 30, 2011     March 31, 2011     Sequential Quarter     Prior Year Quarter  
    Average
  Balances  
   

 

  Interest  
  Income/  
  Expense  

     Yields/ 
Rates
      Average  
   Balances  
      Interest  
  Income/  
  Expense  
     Yields/ 
Rates
      Average  
   Balances  
     Yields/ 
Rates
    Average
  Balances  
     Yields/ 
Rates
 

ASSETS

                   

Loans (Pre-Adoption): 3

                   

  Real estate residential mortgage 1-4 family

    $28,971         $357         4.93      $29,427         $369         5.01      ($456)        (0.08)  %      $333         (0.56)  % 

  Real estate construction

    2,167         21         3.90         2,487         24         3.95         (320)        (0.05)        (1,107)        0.23    

  Real estate home equity lines

    14,347         121         3.37         14,571         121         3.37         (224)               (626)          

  Real estate commercial

    13,156         132         4.02         13,514         137         4.10         (358)        (0.08)        (1,935)        (0.07)   

  Commercial - FTE 1

    35,211         476         5.42         33,925         472         5.64         1,286         (0.22)        2,708         (0.10)   

  Credit card

    967         20         8.33         1,013         21         8.13         (46)        0.20         (97)        (0.12)   

  Consumer - direct

    6,844         77         4.52         6,723         74         4.49         121         0.03         1,300         0.20    

  Consumer - indirect

    9,459         111         4.70         9,473         114         4.89         (14)        (0.19)        2,513         (1.16)   

  Nonaccrual

    3,798         10         1.08         4,029                0.77         (231)        0.31         (1,185)        0.22    
                                                                               

    Total loans

    114,920         1,325         4.62         115,162         1,340         4.72         (242)        (0.10)        1,904         (0.15)   

Securities available for sale:

                   

  Taxable

    23,711         199         3.35         23,705         185         3.12                0.23         (266)        0.24    

  Tax-exempt - FTE 1

    517                5.47         549                5.54         (32)        (0.07)        (349)        0.08    
                                                                               

    Total securities available for sale - FTE 1

    24,228         206         3.40         24,254         192         3.17         (26)        0.23         (615)        0.21    

Funds sold and securities purchased under agreements to resell

    1,079                       1,064                0.01         15         (0.01)        70         (0.11)   

Loans held for sale

    2,104         22         4.17         2,726         28         4.13         (622)        0.04         (1,238)        0.20    

Interest-bearing deposits

    23                0.16         22                0.13                0.03         (4)        (0.01)   

Interest earning trading assets

    3,631         20         2.30         3,558         22         2.49         73         (0.19)        404         (0.73)   
                                                                               

    Total earning assets

    145,985         1,573         4.32         146,786         1,582         4.37         (801)        (0.05)        521         (0.09)   

Allowance for loan and lease losses

    (2,740)            (2,852)            112           367      

Cash and due from banks

    4,452             6,485             (2,033)          (1,336)     

Other assets

    17,348             17,699             (351)          (1,102)     

Noninterest earning trading assets

    2,999             2,654             345           290      

Unrealized gains on securities available for sale, net

    2,483             2,294             189           514      
                                           

    Total assets

    $170,527             $173,066             ($2,539)          ($746)     
                                           

LIABILITIES AND SHAREHOLDERS’ EQUITY

  

                 

Interest-bearing deposits:

                   

  NOW accounts

    $24,672         $10         0.16      $25,370         $11         0.17      ($698)        (0.01)  %      ($277)        (0.09)  % 

  Money market accounts

    42,865         43         0.40         42,603         48         0.46         262         (0.06)        5,162         (0.21)   

  Savings

    4,587                0.18         4,266                0.13         321         0.05         494         (0.04)   

  Consumer time

    12,712         51         1.60         12,774         51         1.61         (62)        (0.01)        (2,067)        (0.36)   

  Other time

    7,203         31         1.74         7,417         33         1.78         (214)        (0.04)        (2,242)        (0.37)   
                                                                               

    Total interest-bearing consumer and commercial deposits

    92,039         137         0.60         92,430         144         0.63         (391)        (0.03)        1,070         (0.27)   

  Brokered deposits

    2,317         25         4.38         2,347         25         4.36         (30)        0.02         (99)        (0.19)   

  Foreign deposits

    23                0.05         259                0.15         (236)        (0.10)        (231)        (0.06)   
                                                                               

    Total interest-bearing deposits

    94,379         162         0.69         95,036         169         0.72         (657)        (0.03)        740         (0.27)   

Funds purchased

    1,001                0.12         1,114                0.18         (113)        (0.06)        (223)        (0.06)   

Securities sold under agreements to repurchase

    2,264                0.14         2,302                0.16         (38)        (0.02)        (368)        -        

Interest-bearing trading liabilities

    922                3.39         930                3.34         (8)        0.05         54         (0.37)   

Other short-term borrowings

    2,934                0.38         2,760                0.41         174         (0.03)        397         (0.10)   

Long-term debt

    13,765         113         3.30         13,806         124         3.64         (41)        (0.34)        (2,764)        (0.45)   
                                                                               

    Total interest-bearing liabilities

    115,265         287         1.00         115,948         305         1.07         (683)        (0.07)        (2,164)        (0.34)   

Noninterest-bearing deposits

    29,840             28,280             1,560           4,349     

Other liabilities

    3,823             3,955             (132)          (417)     

Noninterest-bearing trading liabilities

    2,090             1,776             314           290      

Shareholders’ equity

    19,509             23,107             (3,598)          (2,804)     
                                           

    Total liabilities and shareholders’ equity

    $170,527             $173,066             ($2,539)          ($746)     
                                           
                                           

Interest Rate Spread

        3.32          3.30        0.02        0.25 
                                           
                               

Net Interest Income - FTE 1

      $1,286             $1,277              
                               

Net Interest Margin 2

        3.53          3.53        -            0.20 
                                           

 

 

1The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

2The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

3For comparability to prior periods, the Company has presented loans in this table using the prior period loan classifications. The previous page presents average balances, interest income, and yields for loans under the new classification that aligns with the new loan class presentation in the Company’s 2010 Annual Report on Form 10-K.

 

Page 8


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID, continued

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

 
      Three Months Ended  
     December 31, 2010     September 30, 2010     June 30, 2010  
       Average  
  Balances  
       Interest  
  Income/  
  Expense  
       Yields/  
  Rates  
      Average  
  Balances  
       Interest  
  Income/
  Expense  
       Yields/  
   Rates  
      Average  
  Balances  
       Interest  
  Income/  
  Expense  
       Yields/  
  Rates  
 

ASSETS

                        

Loans:

                        

  Real estate residential mortgage 1-4 family

     $29,789           $378           5.07    %      $29,252           $386           5.27     %      $28,638           $393           5.49     % 

  Real estate construction

     2,839           28           3.98         3,431           33           3.78          3,274           30           3.67     

  Real estate home equity lines

     14,738           126           3.38         14,785           127           3.40          14,973           126           3.37     

  Real estate commercial

     13,967           143           4.07         14,166           146           4.08          15,091           154           4.09     

  Commercial - FTE 1

     33,067           472           5.67         32,491           459           5.60          32,503           447           5.52     

  Credit card

     1,054           21           8.04         1,049           22           8.37          1,064           23           8.45     

  Consumer - direct

     6,565           73           4.38         5,872           66           4.45          5,544           60           4.32     

  Consumer - indirect

     8,683           114           5.19         7,770           108           5.50          6,946           101           5.86     

  Nonaccrual 3

     4,228           7           0.67         4,506           8           0.88          4,983           11           0.86     
                                                                              

    Total loans

     114,930           1,362           4.70         113,322           1,355           4.74          113,016           1,345           4.77     

Securities available for sale:

                        

  Taxable

     25,702           196           3.05         25,502           208           3.26          23,977           186           3.11     

  Tax-exempt - FTE 1

     627           8           5.27         732           10           5.26          866           12           5.39     
                                                                              

    Total securities available for sale - FTE 1

     26,329           204           3.11         26,234           218           3.32          24,843           198           3.19     

Funds sold and securities purchased under agreements to resell

     964           -           0.02         1,021           -           0.08          1,009           -           0.11     

Loans held for sale

     3,312           35           4.17         3,276           35           4.33          3,342           33           3.97     

Interest-bearing deposits

     25           -           0.14         25           -           0.10          27           -           0.17     

Interest earning trading assets

     3,554           22           2.43         3,371           24           2.75          3,227           24           3.03     
                                                                              

    Total earning assets

     149,114           1,623           4.32         147,249           1,632           4.40          145,464           1,600           4.41     

Allowance for loan and lease losses

     (2,958)               (3,035)               (3,107)          

Cash and due from banks

     4,889                4,200                5,788           

Other assets

     17,929                18,019                18,450           

Noninterest earning trading assets

     3,130                3,171                2,709           

Unrealized gains on securities available for sale, net

     2,664                2,395                1,969           
                                          

    Total assets

     $174,768                $171,999                $171,273           
                                          

LIABILITIES AND SHAREHOLDERS’ EQUITY

                        

Interest-bearing deposits:

                        

  NOW accounts

     $24,637           $12           0.20     %      $23,514           $13           0.23     %      $24,949           $16           0.25     % 

  Money market accounts

     41,711           53           0.50          39,839           57           0.57          37,703           57           0.61     

  Savings

     4,087           2           0.19          4,074           3           0.22          4,093           2           0.22     

  Consumer time

     13,360           57           1.68          14,381           68           1.87          14,779           72           1.96     

  Other time

     8,045           37           1.85          8,914           45           2.02          9,445           50           2.11     
                                                                              

    Total interest-bearing consumer and commercial deposits

     91,840           161           0.70          90,722           186           0.81          90,969           197           0.87     

  Brokered deposits

     2,411           27           4.36          2,418           28           4.53          2,416           28           4.57     

  Foreign deposits

     416           -           0.15          322           -           0.15          254           -           0.11     
                                                                              

    Total interest-bearing deposits

     94,667           188           0.79          93,462           214           0.91          93,639           225           0.96     

Funds purchased

     1,092           1           0.19          1,176           1           0.20          1,224           1           0.18     

Securities sold under agreements to repurchase

     2,541           1           0.17          2,505           1           0.16          2,632           1           0.14     

Interest-bearing trading liabilities

     812           7           3.55          917           9           3.61          868           8           3.76     

Other short-term borrowings

     3,464           4           0.40          3,192           3           0.40          2,537           3           0.48     

Long-term debt

     14,914           128           3.41          15,396           138           3.56          16,529           154           3.75     
                                                                              

    Total interest-bearing liabilities

     117,490           329           1.11          116,648           366           1.24          117,429           392           1.34     

Noninterest-bearing deposits

     27,848                26,511                25,491           

Other liabilities

     4,045                3,891                4,240           

Noninterest-bearing trading liabilities

     1,809                1,858                1,800           

Shareholders’ equity

     23,576                23,091                22,313           
                                          

    Total liabilities and shareholders’ equity

     $174,768                $171,999                $171,273           
                                          
                                          

Interest Rate Spread

           3.21    %            3.16    %            3.07    % 
                                          
                                          

Net Interest Income - FTE 1

        $1,294                $1,266                $1,208        
                                          

Net Interest Margin 2

           3.44    %            3.41    %            3.33    % 
                                          

 

 

1The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to   be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

2The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

3Accruing TDRs were classified in Nonaccrual during prior periods. Due to sustained performance, accruing TDRs have been reclassified to the applicable loan category where   the related interest income is being classified in all periods presented.

 

Page 9


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID, continued

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

  

  

  

  

                          
     Six Months Ended  
     June 30, 2011  
     Average
   Balances   
   

 

 

Interest
Income/
  Expense  

    Yields/
  Rates  
 

ASSETS

      

Loans (Post-Adoption): 3

      

Commercial and industrial - FTE 1

     $44,673        $1,165        5.26

Commercial real estate

     5,599        103        3.71   

Commercial construction

     1,334        25        3.81   

Residential mortgages - guaranteed

     4,346        74        3.42   

Residential mortgages - nonguaranteed

     21,982        560        5.10   

Home equity products

     16,068        301        3.77   

Residential construction

     924        24        5.22   

Guaranteed student loans

     4,464        96        4.34   

Other direct

     1,782        43        4.89   

Indirect

     9,466        225        4.79   

Credit cards

     489        30        12.21   

  Nonaccrual

     3,913        18        0.92   
                        

    Total loans

     115,040        2,664        4.67   

Securities available for sale:

      

  Taxable

     23,708        383        3.24   

  Tax-exempt - FTE 1

     533        15        5.51   
                        

    Total securities available for sale - FTE 1

     24,241        398        3.29   

Funds sold and securities purchased under agreements to resell

     1,071        -        -   

Loans held for sale

     2,413        50        4.15   

Interest-bearing deposits

     23        -        0.14   

Interest earning trading assets

     3,595        43        2.39   
                        

    Total earning assets

     146,383        3,155        4.35   

Allowance for loan and lease losses

     (2,796    

Cash and due from banks

     5,463       

Other assets

     17,523       

Noninterest earning trading assets

     2,827       

Unrealized gains on securities available for sale, net

     2,389       
            

    Total assets

     $171,789       
            

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Interest-bearing deposits:

      

  NOW accounts

     $25,019        $21        0.17

  Money market accounts

     42,735        91        0.43   

  Savings

     4,428        3        0.16   

  Consumer time

     12,743        101        1.60   

  Other time

     7,309        64        1.76   
                        

    Total interest-bearing consumer and commercial deposits

     92,234        280        0.61   

  Brokered deposits

     2,332        51        4.37   

  Foreign deposits

     140        1        0.14   
                        

    Total interest-bearing deposits

     94,706        332        0.71   

Funds purchased

     1,057        -        0.15   

Securities sold under agreements to repurchase

     2,283        2        0.15   

Interest-bearing trading liabilities

     926        15        3.37   

Other short-term borrowings

     2,847        6        0.40   

Long-term debt

     13,785        237        3.47   
                        

    Total interest-bearing liabilities

     115,604        592        1.03   

Noninterest-bearing deposits

     29,064       

Other liabilities

     3,889       

Noninterest-bearing trading liabilities

     1,934       

Shareholders’ equity

     21,298       
            

Total liabilities and shareholders’ equity

     $171,789       
            
            

Interest Rate Spread

         3.32
                  

Net Interest Income - FTE 1

       $2,563     
            

Net Interest Margin 2

         3.53
            
                          

1The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

2The net interest margin is calculated by dividing net interest income - FTE by average total earning assets.

3Average balances, interest income, and yields are presented using the new loan classifications as initially adopted in the Company’s 2010 Annual Report on Form 10-K.

    

  

   

 

Page 10


SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA

(Dollars in millions) (Unaudited)

  

  

  

   
     Three Months Ended June 30          Six Months Ended June 30  
                 Increase/(Decrease)                      Increase/(Decrease)  
         2011             2010          Amount            %                    2011             2010         Amount           %        

CREDIT DATA

                   

Allowance for credit losses - beginning

     $2,908          $3,276          ($368)         (11)   %         $3,032          $3,235          ($203)        (6)   % 

Provision/(benefit) for unfunded commitments

     (3)         (40)         (37)         (93)           (7)         (55)         (48)        (87)   

Provision for loan losses

                   

  Commercial

     124          270          (146)         (54)           232          485          (253)        (52)   

  Residential

     252          413          (161)         (39)           574          1,014          (440)        (43)   

  Consumer

     19          19          -                    40          80          (40)        (50)   
                                           

    Total provision for loan losses

     395          702          (307)         (44)           846          1,579          (733)        (46)   
                                           

Charge-offs

                   

  Commercial

     (220)         (251)         (31)         (12)           (405)         (443)         (38)        (9)   

  Residential

     (303)         (470)         (167)         (36)           (688)         (1,078)         (390)        (36)   

  Consumer

     (40)         (47)         (7)         (15)           (85)         (109)         (24)        (22)   
                                           

    Total charge-offs

     (563)         (768)         (205)         (27)           (1,178)         (1,630)         (452)        (28)   
                                           

Recoveries

                   

  Commercial

     41          29          12          41            70          52          18         35    

  Residential

     6          5          1          20            11          10                 10    

  Consumer

     11          12          (1)         (8)           21          25          (4)        (16)   
                                           

    Total recoveries

     58          46          12          26            102          87          15         17    
                                           

  Net charge-offs

     (505)         (722)         (217)         (30)           (1,076)         (1,543)         (467)        (30)   
                                           

Allowance for credit losses - ending

     $2,795          $3,216          ($421)         (13)   %         $2,795          $3,216          ($421)        (13)   % 
                                           

Components:

                   

  Allowance for loan and lease losses

     $2,744          $3,156          ($412)         (13)   %            

  Unfunded commitments reserve

     51          60          (9)         (15)              
                               

Allowance for credit losses

     $2,795          $3,216          ($421)         (13)   %            
                               

Net charge-offs to average loans (annualized) 1

                   

  Commercial

     1.34     %      1.61     %      (0.27)    %           1.26     %      1.42     %      (0.16)   %   

  Residential

     2.65          4.06          (1.41)              3.01          4.66          (1.65)     

  Consumer

     0.71          1.19          (0.48)              0.80          1.43          (0.63)     
                                           

Total net charge-offs to total average loans

     1.76     %      2.57     %      (0.81)    %           1.89     %      2.74     %      (0.85)   %   
                                           

Period Ended

                   

Nonaccrual/nonperforming loans

                   

  Commercial

     $1,563          $2,191          ($628)         (29)   %            

  Residential

     2,013          2,473          (460)         (19)              

  Consumer

     34          35          (1)         (3)              
                               

        Total nonaccrual/nonperforming loans

     3,610          4,699          (1,089)         (23)              

  Other real estate owned (“OREO”)

     483          700          (217)         (31)              

  Other repossessed assets

     11          64          (53)         (83)              
                               

Total nonperforming assets

     $4,104          $5,463          ($1,359)         (25)   %            
                               

Accruing restructured loans

     $2,719          $2,269          $450          20   %            

Nonaccruing restructured loans

     923          986          (63)         (6)              

Accruing loans past due > 90 days (guaranteed)

     1,567          1,223          344          28               

Accruing loans past due > 90 days (non-guaranteed)

     69          153          (84)         (55)              

Total nonperforming loans to total loans

     3.14     %      4.16     %      (1.02)    %      (25)   %            

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

     3.56          4.81          (1.25)         (26)              

Allowance to period-end loans 2,3

     2.40          2.81          (0.41)         (15)              

Allowance to nonperforming loans 2,3

     76.57          67.64          8.93          13               

Allowance to annualized net charge-offs 2

     1.35     x      1.09     x      0.26     x      24                                         

1 Average loans under the new loan classifications in periods prior to the first quarter of 2011 were computed using monthly averages due to an inability to calculate daily averages for prior periods. The Company believes that monthly averages are representative of its operations and materially approximates daily averages.

 

2 This ratio is computed using the allowance for loan and lease losses.

 

3 Loans carried at fair value were excluded from the calculation.

   

  

  

 

Page 11


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER OTHER FINANCIAL DATA

(Dollars in millions) (Unaudited)

  

  

  

   
    Three Months Ended  
      June 30,        March 31,       Increase/(Decrease)       December 31,       September 30,       June 30,   
    2011      2011       Amount       %       2010       2010       2010   

CREDIT DATA

             

Allowance for credit losses - beginning

    $2,908          $3,032          ($124)         (4)      $3,141          $3,216          $3,276     

Provision/(benefit) for unfunded commitments

    (3)         (4)         (1)         (25)         3          (5)         (40)    

Provision for loan losses

             

    Commercial

    124          108          16          15          104          186          270     

    Residential

    252          322          (70)         (22)         379          392          413     

    Consumer

    19          21          (2)         (10)         26          42          19     
                                           

      Total provision for loan losses

    395          451          (56)         (12)         509          620        702     
                                           

Charge-offs

             

    Commercial

    (220)         (185)         35          19          (228)         (251)         (251)    

    Residential

    (303)         (385)         (82)         (21)         (390)         (433)         (470)    

    Consumer

    (40)         (45)         (5)         (11)         (45)         (41)         (47)    
                                           

      Total charge-offs

    (563)         (615)         (52)         (8)         (663)         (725)         (768)    
                                           

Recoveries

             

    Commercial

    41          29          12          41          25          20          29     

    Residential

    6          5          1          20          7          5          5     

    Consumer

    11          10          1          10          10          10          12     
                                           

      Total recoveries

    58          44          14          32          42          35          46     
                                           

    Net charge-offs

    (505)         (571)         (66)         (12)         (621)         (690)         (722)    
                                           

Allowance for credit losses - ending

    $2,795          $2,908          ($113)         (4)      $3,032          $3,141          $3,216     
                                           

Components:

             

    Allowance for loan and lease losses

    $2,744          $2,854          ($110)         (4)      $2,974          $3,086          $3,156     

    Unfunded commitments reserve

    51          54          (3)         (6)         58          55          60     
                                           

Allowance for credit losses

    $2,795          $2,908          ($113)         (4)      $3,032          $3,141          $3,216     
                                           

Net charge-offs to average loans (annualized)1

             

    Commercial

    1.34       1.19       0.15         1.50       1.70       1.61  

    Residential

    2.65          3.37          (0.72)           3.28          3.68          4.06     

    Consumer

    0.71          0.89          (0.18)           0.93          0.91          1.19     
                                           

Total net charge-offs to total average loans

    1.76       2.01       (0.25)        2.14       2.42       2.57  
                                           

Period Ended

             

Nonaccrual/nonperforming loans

             

    Commercial

    $1,563          $1,863          ($300)         (16)      $1,887          $2,058          $2,191     

    Residential

    2,013          2,076          (63)         (3)         2,188          2,273          2,473     

    Consumer

    34          32          2          6          35          42          35     
                                           

          Total nonaccrual/nonperforming loans

    3,610          3,971          (361)         (9)         4,110          4,373          4,699     

    OREO

    483          534          (51)         (10)         596          645          700     

    Other repossessed assets

    11          16          (5)         (31)         52          51          64     

    Nonperforming LHFS

    -          47          (47)         (100)         -          -          -     
                                           

Total nonperforming assets

    $4,104          $4,568          ($464)         (10)      $4,758          $5,069          $5,463     
                                           

Accruing restructured loans

    $2,719          $2,643          $76          3       $2,613          $2,516          $2,269     

Nonaccruing restructured loans

    923          976          (53)         (5)         1,005          988          986     

Accruing loans past due > 90 days (guaranteed)

    1,567          1,570          (3)         -          1,481          1,425          1,223     

Accruing loans past due > 90 days (non-guaranteed)

    69          88          (19)         (22)         84          155          153     

Total nonperforming loans to total loans

    3.14       3.46       (0.32)      (9)      3.54       3.80       4.16  

Total nonperforming assets to total loans plus OREO,

    other repossessed assets, and nonperforming LHFS

    3.56          3.95          (0.39)         (10)         4.08          4.38          4.81     

Allowance to period-end loans2,3

    2.40          2.49          (0.09)         (4)         2.58          2.69          2.81     

Allowance to nonperforming loans2,3

    76.57          72.29          4.28          6          72.86          71.07          67.64     

Allowance to annualized net charge-offs2

    1.35       1.23       0.12       10          1.21       1.13       1.09  

 

1 Average loans under the new loan classifications in periods prior to the first quarter of 2011 were computed using monthly averages due to an inability to calculate daily

averages for prior periods. The Company believes that monthly averages are representative of its operations and materially approximates daily averages.

2 This ratio is computed using the allowance for loan and lease losses.

3 Loans carried at fair value were excluded from the calculation.

 

 

 

Page 12


536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907

SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA, continued

(Dollars in millions) (Unaudited)

  

  

  

                                                                              
    Three Months Ended June 30          Six Months Ended June 30  
      Core Deposit  
Intangibles
    MSRs -
  Fair Value  
      Other         Total            Core Deposit  
Intangibles
    MSRs -
  Amortized Cost  
    MSRs -
  Fair Value  
          Other                 Total        

OTHER INTANGIBLE ASSET ROLLFORWARD

                    

Balance, beginning of period

    $95         $1,641         $64         $1,800            $104         $604         $936         $67         $1,711    

Designated at fair value (transfers from amortized cost)

                                          (604)        604                  

Amortization

    (10)               (4)        (14)           (19)                      (7)        (26)   

Mortgage Servicing Rights (“MSRs”) originated

           68                68                          134                134    

Fair value change due to fair value election

                                                 145                145    

Fair value changes due to inputs and assumptions

           (357)               (357)                         (402)               (402)   

Other changes in fair value

           (54)               (54)                         (119)               (119)   
                                                                          

Balance, June 30, 2010

    $85         $1,298         $60         $1,443            $85         $-         $1,298         $60         $1,443    
                                                                          

 

Balance, beginning of period

    $59         $1,538         $62         $1,659            $67         $-         $1,439         $65         $1,571    

Amortization

    (8)               (4)        (12)           (16)                      (7)        (23)   

MSRs originated

           47                47                          136                136    

Sale of MSRs

                                                 (7)               (7)   

Fair value changes due to inputs and assumptions

           (121)               (121)                         (51)               (51)   

Other changes in fair value

           (41)               (41)                         (94)               (94)   

Other

                  7                                                
                                                                          

Balance, June 30, 2011

    $51         $1,423         $65         $1,539            $51         $-         $1,423         $65         $1,539    
                                                                          
536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907 536,907
    Three Months Ended       
            June 30                   March 31               December 31             September 30                 June 30             
      2011         2011         2010         2010      

  2010  

    

COMMON SHARE ROLLFORWARD (000’s)

              

Balance, beginning of period

    536,817          500,436          499,955          499,929        499,858       

Common shares issued/exchanged for employee benefit plans, stock option, and restricted stock activity

    90          1,127          481          26        71       

Issuance of common stock - Capital Plan

    -          35,254          -          -        -       
                                        

Balance, end of period

    536,907         536,817          500,436          499,955        499,929       
                                        

 

Page 13


SunTrust Banks, Inc. and Subsidiaries

RECONCILEMENT OF NON-GAAP MEASURES

APPENDIX A TO THE EARNINGS RELEASE

(Dollars in millions, except per share data) (Unaudited)

       
     Three Months Ended     Six Months Ended  
         June 30    
2011
        March 31    
2011
        December 31    
2010
        September 30    
2010
        June 30    
2010
        June 30    
2011
        June 30    
2010
 

NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE8

              

Total average assets

     $170,527           $173,066           $174,768           $171,999           $171,273           $171,789           $171,351      

Average net unrealized securities gains

     (2,483)          (2,294)          (2,664)          (2,395)          (1,969)          (2,389)          (1,927)     
                                                        

Average assets less net unrealized securities gains

     $168,044           $170,772           $172,104           $169,604           $169,304           $169,400           $169,424      
                                                        

Total average common shareholders’ equity

     $19,336           $18,269           $18,638           $18,159           $17,387           $18,806           $17,403      

Average accumulated other comprehensive income

     (1,575)          (1,530)          (2,055)          (1,721)          (998)          (1,553)          (944)      
                                                        

Total average realized common shareholders’ equity

     $17,761           $16,739           $16,583           $16,438           $16,389           $17,253           $16,459      
                                                        

Return on average total assets

     0.42        0.42        0.42        0.35        0.03        0.42        (0.17)  

Impact of excluding net realized and unrealized securities (gains)/losses and The Coca-Cola Company stock dividend

     (0.07)          (0.12)          (0.11)          (0.12)          (0.11)          (0.09)          (0.08)     
                                                        

Return on average total assets less net unrealized securities gains1

     0.35        0.30        0.31        0.23        (0.08)       0.33        (0.25)  
                                                        

Return on average common shareholders’ equity

     3.61        0.84        2.44        1.83        (1.29)        2.28        (3.31)  

Impact of excluding net realized and unrealized securities (gains)/losses and The Coca-Cola Company stock dividend

     (0.40)          (1.19)          (0.91)          (1.13)          (1.24)          (0.79)          (0.92)     
                                                        

Return on average realized common shareholders’ equity2

     3.21        (0.35)       1.53        0.70        (2.53)        1.49        (4.23)  
                                                        

Efficiency ratio3

     70.17        67.83        66.57        64.80        69.57        69.01        70.52   

Impact of excluding amortization of intangible assets

     (0.53)          (0.51)          (0.50)          (0.56)          (0.61)          (0.52)          (0.65)     
                                                        

Tangible efficiency ratio4

     69.64        67.32        66.07        64.24        68.96        68.49        69.87   
                                                        

Total shareholders’ equity

     $19,660           $19,223           $23,130           $23,438           $23,024          

Goodwill, net of deferred taxes

     (6,199)          (6,185)          (6,189)          (6,192)          (6,197)         

Other intangible assets including MSRs, net of deferred taxes

     (1,518)          (1,635)          (1,545)          (1,174)          (1,409)         

MSRs

     1,423           1,538           1,439           1,072           1,298            
                                            

Tangible equity

     13,366           12,941           16,835           17,144           16,716          

Preferred stock

     (172)          (172)          (4,942)          (4,936)          (4,929)         
                                            

Tangible common equity

     $13,194           $12,769           $11,893           $12,208           $11,787          
                                            

Total assets

     $172,173           $170,794           $172,874           $174,703           $170,668          

Goodwill

     (6,343)          (6,324)          (6,323)          (6,323)          (6,323)         

Other intangible assets including MSRs

     (1,539)          (1,659)          (1,571)          (1,204)          (1,443)         

MSRs

     1,423           1,538           1,439           1,072           1,298          
                                            

Tangible assets

     $165,714           $164,349           $166,419           $168,248           $164,200          
                                            

Tangible equity to tangible assets5

     8.07        7.87        10.12        10.19        10.18       

Tangible book value per common share6

     $24.57           $23.79           $23.76           $24.42           $23.58          

Net interest income

     $1,259           $1,249           $1,266           $1,238           $1,178           $2,508           $2,350      

Taxable-equivalent adjustment

     27           28           28           28           30           55           60      
                                                        

Net interest income - FTE

     1,286           1,277           1,294           1,266           1,208           2,563           2,410      

Noninterest income

     912           883           1,032           1,047           952           1,795           1,650      
                                                        

Total revenue - FTE

     2,198           2,160           2,326           2,313           2,160           4,358           4,060      

Securities gains, net

     (32)          (64)          (64)          (69)          (57)          (96)          (58)     
                                                        

Total revenue - FTE excluding net securities gains7

     $2,166           $2,096           $2,262           $2,244           $2,103           $4,262           $4,002      
                                                        

 

 

1SunTrust presents a return on average assets less net unrealized gains on securities. The foregoing numbers primarily reflect adjustments to remove the effects of the securities portfolio which includes the ownership by the Company of common 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 securities gains 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 which are primarily client relationship and client transaction driven. The return on average assets less net unrealized gains on securities is computed by dividing annualized net income/(loss), excluding securities (gains)/losses and The Coca-Cola Company stock dividend, net of tax, by average assets less net unrealized securities (gains)/losses.

2SunTrust believes that the return on average realized common shareholders’ equity is more indicative of the Company’s return on equity because the excluded equity relates primarily to the holding of a specific security. The return on average realized common shareholders’ equity is computed by dividing annualized net income/(loss) available to common shareholders, excluding securities (gains)/losses and The Coca-Cola Company stock dividend, net of tax, by average realized common shareholders’ equity.

3Computed by dividing noninterest expense by total revenue - FTE. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

4SunTrust presents a tangible efficiency ratio which excludes the amortization of intangible assets other than MSRs. The Company believes this measure is useful to investors because, by removing the effect of these intangible asset costs (the level of which may vary from company to company), it allows investors to more easily compare the Company’s efficiency to other companies in the industry. This measure is utilized by management to assess the efficiency of the Company and its lines of business.

5SunTrust presents a tangible equity to tangible assets ratio that excludes the after-tax impact of purchase accounting intangible assets. The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity (the level of which may vary from company to company), it allows investors to more easily compare the Company’s capital adequacy to other companies in the industry. This measure is used by management to analyze capital adequacy.

6SunTrust presents a tangible book value per common share that excludes the after-tax impact of purchase accounting intangible assets and also excludes preferred stock from tangible equity. The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity as well as preferred stock (the level of which may vary from company to company), it allows investors to more easily compare the Company’s book value on common stock to other companies in the industry.

7 SunTrust presents total revenue - FTE excluding net securities gains. The Company believes noninterest income without net securities gains is more indicative of the Company’s performance because it isolates income that is primarily client relationship and client transaction driven and is more indicative of normalized operations.

8 Certain amounts in this schedule are presented net of applicable income taxes, which are calculated based on each subsidiary’s federal and state tax rates and laws. In general, the federal marginal tax rate is 35%, but the state marginal tax rates range from 1% to 8% in accordance with the subsidiary’s income tax filing requirements with various tax authorities. In addition, the effective tax rate may differ from the federal and state marginal tax rates in certain cases where a permanent difference exists.

 

Page 14


SunTrust Banks, Inc. and Subsidiaries

RECONCILEMENT OF NON-GAAP MEASURES

APPENDIX A TO THE EARNINGS RELEASE, continued

(Dollars in millions, except per share data) (Unaudited)

       
    Three Months Ended     Six Months Ended  
        June 30    
2011
        March 31    
2011
      December 31 
2010
     September 30 
2010 
        June 30    
2010
        June 30    
2011
        June 30    
2010
 

NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE1

             

Net income/(loss)

    $178         $180         $185         $153         $12         $358         ($149)   

Preferred dividends, Series A

    (2)        (2)        (2)        (2)        (2)        (4)        (4)   

U.S. Treasury preferred dividends and accretion of discount

           (66)        (67)        (67)        (66)        (66)        (132)   

Accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury

           (74)                             (74)          

Dividends and undistributed earnings allocated to unvested shares

    (2)               (2)                      (2)          
                                                       

Net income/(loss) available to common shareholders

    174         38         114         84         (56)        212         (285)   

Securities gains, net of tax

    (20)        (40)        (39)        (43)        (35)        (60)        (36)   

The Coca-Cola Company stock dividend, net of tax

    (13)        (13)        (12)        (12)        (12)        (25)        (24)   
                                                       

Net income/(loss) available to common shareholders excluding securities gains and The Coca-Cola Company stock dividend, net of tax

    $141         ($15)        $63         $29         ($103)        $127         ($345)   
                                                       

 

Net income/(loss) excluding securities gains and The Coca-Cola Company stock dividend, net of tax

    $145         $127         $134         $98         ($35)        $273         ($209)   
                                                       

Net income/(loss) available to common shareholders

    $174         $38         $114         $84         ($56)        $212         ($285)   

Accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury

           74                              74           
                                                       

Net income/(loss) available to common shareholders excluding accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury

    $174         $112         $114         $84         ($56)        $286         ($285)   
                                                       

Net income/(loss) per average common share - diluted

    $0.33         $0.08         $0.23         $0.17         ($0.11)        $0.41         ($0.58)   

Effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury

           0.14                              0.14           
                                                       

Net income/(loss) per average common share - diluted, excluding effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury

    $0.33         $0.22         $0.23         $0.17         ($0.11)        $0.55         ($0.58)   
                                                       

 

 

1Certain amounts in this schedule are presented net of applicable income taxes, which are calculated based on each subsidiary’s federal and state tax rates and laws. In general, the federal marginal tax rate is 35%, but the state marginal tax rates range from 1% to 8% in accordance with the subsidiary’s income tax filing requirements with various tax authorities. In addition, the effective tax rate may differ from the federal and state marginal tax rates in certain cases where a permanent difference exists.

 

Page 15


SunTrust Banks, Inc. and Subsidiaries

RETAIL BANKING LINE OF BUSINESS

(Dollars in millions)    (Unaudited)

  

  

  

                                                  
     Three Months Ended June 30     Six Months Ended June 30  
         2011             2010           % Change           2011             2010           % Change3     

Statements of Income

            

    Net interest income 1

     $632          $629            %      $1,258          $1,239            % 

    FTE adjustment

     -          -                 -          -            
                                    

    Net interest income - FTE

     632           629                 1,258          1,239            

    Provision for credit losses 2

     197           251          (22)        413          535          (23)   
                                    

    Net interest income - FTE - after provision for credit losses

     435           378          15         845          704          20    
                                    

    Noninterest income before securities gains/(losses)

     280          302          (7)        544          578          (6)   

    Securities gains/(losses), net

     -          -                 -          -            
                                    

        Total noninterest income

     280          302          (7)        544          578          (6)   
                                    

    Noninterest expense before amortization of intangible assets

     645          610                 1,266          1,206            

    Amortization of intangible assets

     8          10          (20)        16          20          (20)   
                                    

        Total noninterest expense

     653          620                 1,282          1,226            
                                    

    Income before provision for income taxes

     62          60                 107          56          91    

    Provision for income taxes

     23          21          10         39          19          NM    

    FTE adjustment

     -          -                 -          -            
                                    

    Net income including income attributable to noncontrolling interest

     39          39                 68          37          84    

    Less: net income attributable to noncontrolling interest

     -          -                 -          -            
                                    

    Net income

     $39          $39                 $68          $37          84    
                                    

    Total revenue - FTE

     $912          $931          (2)        $1,802          $1,817          (1)   

Selected Average Balances

            

    Total loans

     $35,021          $32,740          7    %      $35,176          $32,689          8     % 

    Goodwill

     4,854          4,854                 4,854          4,854            

    Other intangible assets excluding MSRs

     61          98          (38)        65          103          (37)   

    Total assets

     40,458          38,548                 40,595          38,611            

    Consumer and commercial deposits

     77,372          75,502                 76,640          74,681            

Performance Ratios

            

    Efficiency ratio

     71.58     %      66.68     %        71.18     %      67.45     %   

    Impact of excluding amortization of intangible assets

     (4.66)         (4.90)           (4.73)         (5.06)      
                                    

    Tangible efficiency ratio

     66.92     %      61.78     %        66.45     %      62.39     %   
                                    

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s

    equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 16


SunTrust Banks, Inc. and Subsidiaries

DIVERSIFIED COMMERCIAL BANKING LINE OF BUSINESS

(Dollars in millions)    (Unaudited)

  

  

  

                                                  
     Three Months Ended June 30     Six Months Ended June 30  
           2011                 2010           % Change3           2011                 2010           % Change3  
Statements of Income             

    Net interest income1

     $148          $133          11       $294          $262          12  

    FTE adjustment

     25          27          (7)         50          54          (7)    
                                    

    Net interest income - FTE

     173          160          8          344          316          9     

    Provision for credit losses2

     30          41          (27)         38          64          (41)    
                                    

    Net interest income - FTE - after provision for credit losses

     143          119          20          306          252          21     
                                    

    Noninterest income before securities/(losses) gains

     65          57          14          122          109          12     

    Securities gains/(losses), net

     -          -          -          -          -          -     
                                    

        Total noninterest income

     65          57          14          122          109          12     
                                    

    Noninterest expense before amortization of intangible assets

     120          112          7          235          228          3     

    Amortization of intangible assets

     -          -          -          -          -          -     
                                    

        Total noninterest expense

     120          112          7          235          228          3     
                                    

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

     88          64          38          193          133          45     

    Provision/(benefit) for income taxes

     7          (3)         NM          21          (6)         NM     

    FTE adjustment

     25          27          (7)          50          54          (7)    
                                    

    Net income including income attributable to noncontrolling interest

     56          40          40          122          85          44     

    Less: net income attributable to noncontrolling interest

     -          -          -          -          -          -     
                                    

    Net income

     $56          $40          40          $122          $85          44     
                                    

    Total revenue - FTE

     $238          $217          10          $466          $425          10     
Selected Average Balances             

    Total loans

     $22,649          $22,457          1       $22,585          $22,596          -  

    Goodwill

     928          927          -          928          928          -     

    Other intangible assets excluding MSRs

     -          -          -          -          -          -     

    Total assets

     24,771          24,753          -          24,714          24,945          (1)    

    Consumer and commercial deposits

     18,955          18,162          4          19,064          18,731          2     
Performance Ratios             

    Efficiency ratio

     50.59       51.79         50.39       53.67    

    Impact of excluding amortization of intangible assets

     (1.98)         (2.45)           (2.04)         (2.59)      
                                    

    Tangible efficiency ratio

     48.61       49.34         48.35       51.08    
                                    

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 17


(16) (16) (16) (16) (16) (16)

SunTrust Banks, Inc. and Subsidiaries

COMMERCIAL REAL ESTATE LINE OF BUSINESS

(Dollars in millions)     (Unaudited)

 
                                                  
     Three Months Ended June 30     Six Months Ended June 30  
         2011             2010             % Change             2011             2010             % Change      

Statements of Income

            

    Net interest income 1

     $36         $43         (16)  %      $71         $85         (16)  % 

    FTE adjustment

     -          -                        -          100    
                                    

    Net interest income - FTE

     36         43         (16)        72         85         (15)   

    Provision for credit losses 2

     112         118         (5)        219         188         16    
                                    

    Net interest income - FTE - after provision for credit losses

     (76)        (75)               (147)        (103)        43    
                                    

    Noninterest income before securities gains/(losses)

     22         19         16         48         40         20    

    Securities gains/(losses), net

     -          -          -          -          -          -     
                                    

        Total noninterest income

     22         19         16         48         40         20    
                                    

    Noninterest expense before amortization of intangible assets

     109         114         (4)        217         203           

    Amortization of intangible assets

     -          -          -          -          -          -     
                                    

        Total noninterest expense

     109         114         (4)        217         203           
                                    

    Loss - FTE - before benefit for income taxes

     (163)        (170)        (4)        (316)        (266)        19    

    Benefit for income taxes

     (81)        (84)        (4)        (158)        (139)        14    

    FTE adjustment

     -          -          -                 -          100    
                                    

    Loss including income attributable to noncontrolling interest

     (82)        (86)        (5)        (159)        (127)        25    

    Less: net income attributable to noncontrolling interest

     -          -          -          -          -          -     
                                    

    Net loss

     ($82)        ($86)        (5)        ($159)        ($127)        25    
                                    

    Total revenue - FTE

     $58         $62         (6)        $120         $125         (4)   

Selected Average Balances

            

    Total loans

     $7,354         $10,185         (28)  %      $7,654         $10,501         (27)  % 

    Goodwill

     -          -          -          -          -          -     

    Other intangible assets excluding MSRs

     -          -          -          -          -          -     

    Total assets

     8,262         11,255         (27)        8,580         11,582         (26)   

    Consumer and commercial deposits

     1,520         1,609         (6)        1,475         1,679         (12)   

Performance Ratios

            

    Efficiency ratio

     186.50  %      185.37        180.31  %      162.21   

    Impact of excluding amortization of intangible assets

     -          -            -          -       
                                    

    Tangible efficiency ratio

     186.50  %      185.37        180.31  %      162.21   
                                    

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s   equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

 

Page 18


SunTrust Banks, Inc. and Subsidiaries

CORPORATE AND INVESTMENT BANKING LINE OF BUSINESS

(Dollars in millions)      (Unaudited)

  

  

  

                                                  
     Three Months Ended June 30     Six Months Ended June 30  
           2011                 2010           % Change           2011                 2010           % Change  
Statements of Income             

    Net interest income 1

     $120          $93          29       $237          $177          34  

    FTE adjustment

     1          -          100          1          1          -     
                                    

    Net interest income - FTE

     121          93          30          238          178          34     

    Provision for credit losses 2

     3          7          (57)         3          36          (92)    
                                    

    Net interest income - FTE - after provision for credit losses

     118          86          37          235          142          65     
                                    

    Noninterest income before securities gains/(losses)

     193          142          36          370          255          45     

    Securities gains/(losses), net

     -          -          -          -          -          -     
                                    

        Total noninterest income

     193          142          36          370          255          45     
                                    

    Noninterest expense before amortization of intangible assets

     148          122          21          295          232          27     

    Amortization of intangible assets

     -          -          -          -          -          -     
                                    

        Total noninterest expense

     148          122          21          295          232          27     
                                    

    Income - FTE - before provision for income taxes

     163          106          54          310          165          88     

    Provision for income taxes

     59          39          51          113          60          88     

    FTE adjustment

     1          -          100          1          1          -     
                                    

    Net income including income attributable to noncontrolling interest

     103          67          54          196          104          88     

    Less: net income attributable to noncontrolling interest

     -          -          -          -          -          -     
                                    

    Net income

     $103          $67          54          $196          $104          88     
                                    

    Total revenue - FTE

     $314          $235          34          $608          $433          40     
Selected Average Balances             
    Total loans      $13,338          $10,762          24       $12,783          $10,871          18  

    Goodwill

     180          180          -          180          180          -     

    Other intangible assets excluding MSRs

     -          -          -          -          -          -     

    Total assets

     23,120          19,557          18          22,288          19,212          16     

    Consumer and commercial deposits

     8,241          6,663          24          8,110          6,334          28     
Performance Ratios             

    Efficiency ratio

     47.09       51.78         48.48       53.61    

    Impact of excluding amortization of intangible assets

     (0.28)         (0.46)           (0.30)         (0.52)      
                                    

    Tangible efficiency ratio

     46.81       51.32         48.18       53.09    
                                    

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

 

Page 19


$162,915 $162,915 $162,915 $162,915 $162,915 $162,915

SunTrust Banks, Inc. and Subsidiaries

MORTGAGE LINE OF BUSINESS

(Dollars in millions)    (Unaudited)

 
                                                 
    Three Months Ended June 30     Six Months Ended June 30  
        2011             2010             % Change             2011             2010             % Change      

Statements of Income

           

Net interest income1

    $116          $106          9       $241          $208          16  

FTE adjustment

    -          -          -          -          -          -     
                                   

Net interest income - FTE

    116          106          9          241          208          16     

Provision for credit losses2

    153          289          (47)         376          691          (46)    
                                   

Net interest income - FTE - after provision for credit losses

    (37)         (183)         (80)         (135)         (483)         (72)    
                                   

Noninterest income before securities losses

    76          78          (3)         157          127          24     

Securities losses, net

    (1)         (1)         -          (1)         (2)         (50)    
                                   

Total noninterest income

    75          77          (3)         156          125          25     
                                   

Noninterest expense before amortization of intangible assets

    277          261          6          528          514          3     

Amortization of intangible assets

    -                 -          -          -          -     
                                   

Total noninterest expense

    277          261          6          528          514          3     
                                   

Loss before benefit for income taxes

    (239)         (367)         (35)         (507)         (872)         (42)    

Benefit for income taxes

    (92)         (139)         (34)         (195)         (331)         (41)    

FTE adjustment

    -          -          -          -          -          -     
                                   

Net loss including income attributable to noncontrolling interest

    (147)         (228)         (36)         (312)         (541)         (42)    

Less: net income attributable to noncontrolling interest

    -          -          -        -          -          -     
                                   

Net loss

    ($147)         ($228)         (36)         ($312)         ($541)         (42)    
                                   

Total revenue - FTE

    $191          $183          4          $397          $333          19     

Selected Average Balances

           

Total loans

    $28,822          $28,662          1       $29,067          $28,773          1  

Goodwill

    -          -          -          -          -          -     

Other intangible assets excluding MSRs

    -          -          -          -          -          -     

Total assets

    33,363          34,624          (4)         33,947          34,662          (2)    

Consumer and commercial deposits

    2,695          2,749          (2)         2,838          2,597          9     

Performance Ratios

           

Efficiency ratio

    144.64       142.25         133.03       154.45    

Impact of excluding amortization of intangible assets

    -        -            -          -       
                                   

Tangible efficiency ratio

    144.64       142.25         133.03       154.45    
                                   

Other Information

           

Production Data

           

Channel mix

           

Retail

    $3,306          $3,767          (12)      $7,022          $7,019          -  

Wholesale

    548          1,600          (66)         1,317          2,938          (55)    

Correspondent

    837          1,628          (49)         2,103          2,684          (22)    
                                   

Total production

    $4,691          $6,995          (33)         $10,442          $12,641          (17)    
                                   

Channel mix - percent

           

Retail

    70       54         67       56    

Wholesale

    12          23            13          23       

Correspondent

    18          23            20          21       
                                   

Total production

    100       100         100       100    
                                   

Purchase and refinance mix

           

Refinance

    $2,231          $3,240          (31)          $6,308          $6,681          (6)   

Purchase

    2,460          3,755          (34)          4,134          5,960          (31)   
                                   

Total production

    $4,691          $6,995          (33)          $10,442          $12,641          (17)   
                                   

Purchase and refinance mix - percent

           

Refinance

    48       46         60       53    

Purchase

    52          54            40          47       
                                   

Total production

    100       100         100       100    
                                   

Applications

    $10,548          $12,890          (18)         $19,642          $22,787          (14)    

Mortgage Servicing Data (End of Period)

           

Total loans serviced

    $162,915          $177,808          (8)       

Total loans serviced for others

    131,548          145,845          (10)          

Net carrying value of MSRs

    1,423          1,298          10           

Ratio of net carrying value of MSRs to total loans serviced for others

    1.082       0.890          

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s   equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

 

Page 20


SunTrust Banks, Inc. and Subsidiaries

WEALTH AND INVESTMENT MANAGEMENT LINE OF BUSINESS

(Dollars in millions)    (Unaudited)

  

  

  

                                                  
     Three Months Ended June 30     Six Months Ended June 30  
           2011                 2010           % Change           2011                 2010           % Change  
Statements of Income             

    Net interest income 1

     $102          $95          7       $204          $187          9  

    FTE adjustment

     -          -          -          -          -          -     
                                    

    Net interest income - FTE

     102          95          7          204          187          9     

    Provision for credit losses 2

     11          16          (31)         28          29          (3)    
                                    

    Net interest income - FTE - after provision for credit losses

     91          79          15          176          158          11     
                                    

    Noninterest income before securities gains/(losses)

     208          197          6          423          382          11     

    Securities gains/(losses), net

     -          -          -          -          -          -     
                                    

        Total noninterest income

     208          197          6          423          382          11     
                                    

    Noninterest expense before amortization of intangible assets

     237          216          10          471          435          8     

    Amortization of intangible assets

     4          3          33          6          6          -     
                                    

        Total noninterest expense

     241          219          10          477          441          8     
                                    

    Income before provision for income taxes

     58          57          2          122          99          23     

    Provision for income taxes

     22          21          5          43          37          16     

    FTE adjustment

     -          -          -          -          -          -     
                                    

    Net income including income attributable to noncontrolling interest

     36          36          -          79          62          27     

    Less: net income attributable to noncontrolling interest

     (1)         -          (100)         4          -          -     
                                    

    Net income

     $37          $36          3          $75          $62          21     
                                    

    Total revenue - FTE

     $310          $292          6          $627          $569          10     
Selected Average Balances             

    Total loans

     $7,522          $8,072          (7)   %      $7,567          $8,070          (6) 

    Goodwill

     372          361          3          367          360          2     

    Other intangible assets excluding MSRs

     53          52          2          54          53          2     

    Total assets

     8,640          9,157          (6)         8,678          9,112          (5)    

    Consumer and commercial deposits

     12,148          11,070          10          12,227          11,052          11     
Performance Ratios             

    Efficiency ratio

     77.72   %      75.18         76.16   %      77.43    

    Impact of excluding amortization of intangible assets

     (2.24)         (2.21)           (2.07)         (2.31)      
                                    

    Tangible efficiency ratio

     75.48   %      72.97         74.09   %      75.12    
                                    
Other Information (End of Period)             

    Assets under adminstration 3

            

        Managed (discretionary) assets

     $104,722          $116,096          (10)   %       

        Non-managed assets

     49,928          44,244          13           
                        

          Total assets under administration

     154,650          160,340          (4)          
                        

    Brokerage assets

     35,745          32,383          10           

    Corporate trust assets

     10,572          8,344          27           
                        

    Total assets under advisement

     $200,967          $201,067          -           
                        

 

 

1 Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s   equity is not allocated to the lines of business at this time.

2 Provision for credit losses represents net charge-offs for the lines of business.

3 June 30, 2010 assets under advisement and assets under administration includes $16 billion in money market fund assets that were previously managed by RidgeWorth.   SunTrust completed the sale of its money market fund business to Federated Investors, Inc. in the fourth quarter of 2010.

 

Page 21


SunTrust Banks, Inc. and Subsidiaries

CORPORATE OTHER AND TREASURY

(Dollars in millions) (Unaudited)

  

  

  

                                                 
    Three Months Ended June 30     Six Months Ended June 30  
        2011             2010             %  Change3             2011             2010             %  Change3      

Statements of Income

           

 

   Net interest income

    $105          $79          33    %      $203          $192          6   % 

   FTE adjustment

    1          3          (67)        3          5          (40)   
                                   

   Net interest income - FTE

    106          82          29         206          197            

   Provision for credit losses1

    (114)         (60)         90         (238)         (19)         NM    
                                   

   Net interest income - FTE - after provision for credit losses

    220          142          55         444          216          NM    
                                   

   Noninterest income before securities gains

    36          100          (64)        35          101          (65)   

   Securities gains, net

    33          58          (43)        97          60          62    
                                   

     Total noninterest income

    69          158          (56)        132          161          (18)   
                                   

 

   Noninterest expense before amortization of intangible assets

    (6)         55          NM         (28)         20          NM    

   Amortization of intangible assets

    -           -                 1          -          100    
                                   

     Total noninterest expense

    (6)         55          NM         (27)         20          NM    
                                   

   Income - FTE - before provision for income taxes

    295          245          20         603          357          69    

   Provision for income taxes

    120          95          26         228          116          97    

   FTE adjustment

    1          3          (67)        3          5          (40)   
                                   

   Net income including income attributable to noncontrolling interest

    174          147          18         372          236          58    

   Less: net income attributable to noncontrolling interest

    2          3          (33)        4          5          (20)   
                                   

   Net income

    $172          $144          19         $368          $231          59    
                                   

   Total revenue - FTE

    $175          $240          (27)        $338          $358          (6)   

Selected Average Balances

 

           

   Total loans

    $214          $138          55   %      $208          $221          (6)   % 

   Securities available for sale

    24,139          25,029          (4)        24,181          25,508          (5)   

   Goodwill

    -          1          (100)        -          -            

   Other intangible assets excluding MSRs

    3          3                 3          3            

   Total assets

    31,913          33,379          (4)        32,987          33,227          (1)   

   Consumer and commercial deposits

    948          705          34         944          702          34    

Other Information

           

   Duration of investment portfolio

    3.0   %      2.5   %         

   Accounting net interest income interest rate sensitivity2:

           

      % Change in net interest income under:

           

           Instantaneous 100 bp increase in rates over next

           12 months

    -   %      0.6   %         

           Instantaneous 100 bp decrease in rates over next

           12 months

    (1.3)   %      (0.7)   %         

   Economic net interest income interest rate sensitivity2:

           

      % Change in net interest income under:

           

           Instantaneous 100 bp increase in rates over next

           12 months

    (0.2)   %      0.1   %         

           Instantaneous 100 bp decrease in rates over next

           12 months

    (1.2)   %      (0.3)   %         

    

                                               

1 Provision for credit losses is the difference between net charge-offs recorded by the lines of business and consolidated provision for credit losses.

2 The recognition of interest rate sensitivity from an accounting perspective is different from the economic perspective due to the election of fair value accounting for certain long term debt and the related interest rate swaps. The net interest income sensitivity profile from an economic perspective assumes the net interest payments from the related swaps were included in net interest income.

3 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 22


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED - SEGMENT TOTALS

(Dollars in millions)    (Unaudited)

                                                  
     Three Months Ended June 30     Six Months Ended June 30  
     2011     2010     Change1     2011     2010     Change1  

Statements of Income

            

Net interest income

     $1,259         $1,178             $2,508         $2,350        

FTE adjustment

     27         30         (10)        55         60         (8)   
                                    

Net interest income - FTE

     1,286         1,208                2,563         2,410           

Provision for credit losses

     392         662         (41)        839         1,524         (45)   
                                    

Net interest income - FTE - after provision for credit losses

     894         546         64         1,724         886         95    
                                    

Noninterest income before securities gains

     880         895         (2)        1,699         1,592           

Securities gains, net

     32         57         (44)        96         58         66    
                                    

Total noninterest income

     912         952         (4)        1,795         1,650           
                                    

Noninterest expense before amortization of intangible assets

     1,530         1,490                2,984         2,838           

Amortization of intangible assets

     12         13         (8)        23         26         (12)   
                                    

Total noninterest expense

     1,542         1,503                3,007         2,864           
                                    

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

     264         (5)        NM         512         (328)        NM    

Provision/(benefit) for income taxes

     58         (50)        NM         91         (244)        NM    

FTE adjustment

     27         30         (10)        55         60         (8)   
                                    

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

     179         15         NM         366         (144)        NM    

Less: net income attributable to noncontrolling interest

                   (67)                      60    
                                    

Net income/(loss)

     $178         $12         NM         $358         ($149)        NM    
                                    

Total revenue - FTE

     $2,198         $2,160                $4,358         $4,060           

Selected Average Balances

            

Total loans

     $114,920         $113,016             $115,040         $113,721        

Goodwill

     6,334         6,323                6,329         6,322           

Other intangible assets excluding MSRs

     117         153         (24)        122         159         (23)   

Total assets

     170,527         171,273                171,789         171,351           

Consumer and commercial deposits

     121,879         116,460                121,298         115,776           

Performance Ratios

            

Efficiency ratio

     70.17      69.57        69.01      70.52   

Impact of excluding amortization of intangible assets

     (0.53)        (0.61)          (0.52)        (0.65)     
                                    

Tangible efficiency ratio

     69.64      68.96        68.49      69.87   
                                    

 

 

1 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 23