EX-99.1

EX-99.1 2 d526124dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

First Quarter 2013 Financial Highlights

Income Statement

•

Continued expense reductions and improvement in credit quality drove net income available to common shareholders of $340 million, or $0.63 per average common diluted share.

•

Revenue, excluding securities gains, decreased 4% compared to the first quarter of last year, due to declines in both net interest and noninterest income.

•

Net interest income declined due to net interest margin compression of 16 basis points compared to the first quarter of last year, as the decline in earning asset yields outpaced the decline in interest-bearing liability costs.

•

Noninterest income decreased from the prior quarter due to lower mortgage production income. Investment banking income also declined, as the seasonally lower first quarter followed a record fourth quarter.

•

Noninterest expense decreased 12% compared to the first quarter of last year, on broad based reductions across most categories. Expenses were at their lowest level in three years.

Balance Sheet

•

Average loans decreased 1% compared to the first quarter of last year. The decreases were predominantly related to declines in residential real estate and government guaranteed student loans, which were substantially offset by targeted growth in commercial and industrial loans.

•

Average client deposits were essentially flat on a sequential quarter basis and increased 1% compared to the first quarter of last year. In both periods, we experienced a shift out of higher cost time deposits into lower cost deposit products.

Capital

•

Estimated capital ratios continued to be well above current regulatory requirements. The Tier 1 common equity ratio increased to an estimated 10.10%, up from 10.04% at year end.

•

During the quarter, the Company announced capital plans that included up to $200 million of common share repurchases by the end of the first quarter of 2014.

Asset Quality

•

The overall risk profile of the balance sheet continued to improve. Nonperforming loans decreased 5% during the quarter and were 1.21% of total loans at March 31, 2013, compared to 2.16% a year ago.

•

Annualized net charge-offs decreased to 0.76% of average loans compared to 1.38% in the first quarter of last year. Current quarter net charge-offs were at their lowest level in five years.

•

The provision for credit losses declined approximately 35% compared to the first quarter of last year.


	Three Months Ended March 31,
Income Statement (presented on a fully taxable-equivalent basis)	2012			2013
(Dollars in millions, except per share data)
Net income available to common shareholders	$	245		$	340
Earnings per average common diluted share		0.46			0.63
Total revenue		2,218			2,114
Total revenue, excluding net securities gains/losses		2,200			2,112
Net interest income		1,342			1,251
Provision for credit losses		317			212
Noninterest income		876			863
Noninterest expense		1,541			1,363
Net interest margin		3.49	%		3.33	%

Balance Sheet
(Dollars in billions)
Average loans	$	122.5		$	120.9
Average consumer and commercial deposits		125.8			127.7

Capital
Tier 1 capital ratio ⁽¹⁾		11.00	%		11.20	%
Tier 1 common equity ratio ⁽¹⁾		9.33	%		10.10	%
Total average shareholders’ equity to total average assets		11.45	%		12.29	%

Asset Quality
Net charge-offs to average loans (annualized)		1.38	%		0.76	%
Allowance for loan losses to period end loans		1.92	%		1.79	%
Nonperforming loans to total loans		2.16	%		1.21	%

(1)	Current period Tier 1 capital and Tier 1 common equity ratios are estimated as of April 19, 2013.

Consolidated Financial Performance Details

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

Revenue

Total revenue was $2.1 billion for the first quarter, a decrease of $177 million compared to the prior quarter. The decline was driven by lower mortgage-related income, record fourth quarter investment banking revenue, and lower net interest income. Total revenue compared to the first quarter of last year decreased $104 million due primarily to lower net interest income.

Net Interest Income

Net interest income was $1.3 billion for the current quarter, a decrease of $25 million from the prior quarter, primarily driven by two fewer days in the current quarter. Net interest income decreased $91 million compared to the first quarter of last year due to lower earning asset yields, which were impacted by a decrease in commercial loan-related swap income and the foregone dividend income related to the third quarter 2012 accelerated termination of the agreements regarding the shares formerly owned in The Coca-Cola Company. These decreases were partially offset by lower deposit rates and a reduction in long-term debt.

Net interest margin for the first quarter was 3.33%, a decrease of 3 basis points from the prior quarter and 16 basis points from the first quarter of last year. On a sequential quarter basis, earning asset yields declined 6 basis points as a result of the continued low interest rate environment. Partially offsetting this decrease was a 2 basis point reduction on interest-bearing liabilities due to modestly lower rates paid on deposits. Compared to the first quarter of last year, the decrease in net interest margin was primarily due to a 34 basis point decrease in loan yields, driven by the continued low interest rate environment and a decrease in commercial loan-related swap income, as well as a 60 basis point decrease in the yield on the investment securities portfolio, approximately 26 basis points of which was due to the forgone dividend income associated with The Coca-Cola Company stock. These decreases were partially offset by a 25 basis point decline in rates paid on interest-bearing liabilities, primarily related to time deposits and long-term debt.

Noninterest Income

Total noninterest income was $863 million for the current quarter compared to $1,015 million for the prior quarter and $876 million for the first quarter of last year. The $152 million sequential quarter decrease was largely driven by lower mortgage and capital markets-related revenue, as well as a reduction in certain other categories due to fewer business days in the current quarter. Compared to the first quarter of last year, the $13 million decrease was primarily driven by reductions in mortgage servicing related income, securities gains, and trading income and was largely offset by a lower mortgage repurchase provision.

Mortgage production income for the current quarter was $159 million compared to $241 million for the prior quarter and $63 million for the first quarter of last year. The $82 million sequential quarter decrease was primarily driven by declines in margins. Partially offsetting the decline was higher origination fees due to the 11% increase in loan production volume as compared to prior quarter. Relative to the first quarter of last year, mortgage production income increased $96 million due to the $161 million decline in the mortgage repurchase provision, partially offset by reduced margins. At March 31, 2013, the reserve for mortgage repurchases totaled $513 million, a decrease of $119 million from the prior quarter as resolution activity on outstanding repurchase requests increased during the current quarter. Consistent with prior expectations, repurchase demands increased in the current quarter compared to recent quarters, while full file requests - a leading indicator of future demands - decreased.

Mortgage servicing income was $38 million for the current quarter compared to $45 million for the prior quarter and $81 million for the first quarter of last year. The $7 million sequential quarter decrease was due to lower servicing fees resulting from a decline in the mortgage servicing portfolio. The $43 million decrease compared to the first quarter of last year was due to lower servicing fees and less favorable net hedge performance. At March 31, 2013, the servicing portfolio was $142 billion compared to $155 billion at March 31, 2012, with the decline driven by the elevated level of refinance volume and the sales of certain loans in the portfolio.

Investment banking income was $68 million for the current quarter compared to $112 million in the prior quarter and $71 million in the first quarter of last year. The sequential quarter decrease was due to the record fourth quarter, which included an accelerated level of deal activity at year end, whereas the current quarter experienced seasonally lower levels of activity, most notably in loan syndications and high yield bond originations.

Trading income was $42 million for the current quarter compared to $65 million for the prior quarter and $57 million for the first quarter of last year. The $23 million sequential quarter decrease was largely attributable to reduced trading-related litigation reserves recognized in the previous quarter. The $15 million decline in trading income compared to the first quarter of last year was largely driven by an addition to our counterparty valuation reserve in the current quarter. Mark-to-market valuation losses on the Company’s fair value debt and index-linked CDs were $24 million in the current quarter, which was approximately equal to the losses experienced during the first and fourth quarters of last year.

Other noninterest income for the current quarter was $44 million compared to $18 million for the prior quarter and $57 million for the first quarter of last year. The $26 million sequential quarter increase was primarily due to $25 million of net losses recognized from the sales of loans in the prior quarter. The $13 million decrease from the first quarter of last year was primarily due to lower gains from the sales of leases.

Noninterest Expense

Noninterest expense was $1.4 billion for the current quarter, a sequential quarter decrease of $147 million, or 10%, and a decline from the prior year of $178 million, or 12%. The declines from both periods were broad-based, reflecting the Company’s continued expense reduction initiatives and the abatement of cyclically high costs.

Employee compensation and benefits expense was $759 million in the current quarter, up $21 million on a sequential quarter basis, primarily due to an approximate $35 million seasonal increase in employee benefits. The higher benefits expense was partially offset by a decrease in salaries, attributable to a reduction in full-time equivalent employees during the quarter, and lower incentive compensation. Compared to the first quarter of last year, employee compensation and benefits expense decreased $38 million, largely attributable to the reduction in full-time equivalent employees, as well as lower incentive compensation.

Operating losses were $39 million in the current quarter, a decrease of $38 million compared to the prior quarter and $21 million compared to the first quarter of last year. On a sequential quarter basis, the decline was primarily due to the $32 million fourth quarter expense related to the Acceleration and Remediation Agreement with the Federal Reserve Board and the Office of the Comptroller of the Currency regarding the Independent Foreclosure Review. The decrease compared to the first quarter of last year was driven by declines in litigation-related expenses and mortgage servicing-related compensatory fees.

Marketing and customer development expense was $30 million in the current quarter. This was a $20 million decline on a sequential basis due to seasonality and a modest increase compared to the first quarter of last year.

Other noninterest expense was $163 million, a decrease of $98 million from the prior quarter and $122 million from the first quarter of last year. The sequential quarter decline was largely driven by reductions in legal and consulting expenses, credit-related expenses (which are comprised of other real estate expenses and credit and collection costs), and franchise taxes. The decrease compared to the first quarter of last year was primarily due to reductions in credit-related, severance, and legal and consulting expenses.

Income Taxes

For the current quarter, the Company recorded an income tax provision of $151 million compared to $62 million for the prior quarter and $69 million for the first quarter of last year. The effective tax rate was 30% for the current quarter compared to 15% for the prior quarter and 22% for the first quarter of last year. The increase in the effective tax rate from the prior quarter was primarily due to the favorable impact of certain discrete tax items during the fourth quarter. The effective tax rate increase compared to the first quarter of last year was due to higher pre-tax earnings in the current quarter.

Balance Sheet

At March 31, 2013, the Company had total assets of $172 billion and shareholders’ equity of $21 billion, representing 12% of total assets. Book value and tangible book value per common share increased compared to the first quarter of last year, and were $37.89 and $26.33, respectively.

Loans

For the current quarter, average performing loans were $119.4 billion, a decrease of $0.6 billion, or 1%, from the prior quarter driven by declines in government guaranteed student and residential real estate loans, partially offset by increases in C&I and indirect auto loans. Average loans decreased $1.7 billion, or 1%, compared to the first quarter of last year. The decline was due to government guaranteed student and mortgage loans, which decreased $1.9 billion and $2.4 billion, respectively, due to sales during 2012. Home equity loans also decreased $0.9 billion due to continued loan payoffs. Partially offsetting these decreases was an increase in C&I loans, which increased $4.2 billion, or 9%.

Securities Available for Sale

For the current quarter, the securities available for sale portfolio averaged $23.3 billion, an increase of $1.7 billion from the prior quarter and a decrease of $4.3 billion from the first quarter of last year. The increase compared to the prior quarter was primarily the result of increased holdings of U.S. Treasury and government agency securities, as we opportunistically reinvested the proceeds from fourth quarter loan sales. The investment portfolio declined from the first quarter of last year due to the aforementioned transaction regarding The Coca-Cola Company stock, as well as reduced holdings of government agency mortgage-backed securities.

Deposits

Average consumer and commercial deposits for the current quarter were $127.7 billion compared to $127.9 billion for the prior quarter and $125.8 billion for the first quarter of last year. The slight decrease during the current quarter was driven by a seasonal decline of $1.3 billion, or 3%, in demand deposits and a decrease of $0.6 billion, or 4%, in time deposits. These decreases were predominantly offset by increases of $0.8 billion, or 3%, in interest bearing transaction accounts, $0.5 billion, or 1%, in money market accounts, and $0.3 billion, or 6%, in savings accounts. The $1.8 billion, or 1%, increase compared to the first quarter of last year was driven by the favorable shift during 2012 toward lower-cost accounts as average demand deposits increased $2.7 billion, or 8%, interest bearing transaction accounts increased $1.1 billion, or 4%, money market accounts increased $0.5 billion, or 1%, and savings accounts increased $0.7 billion, or 14%. The growth in these categories was partially offset by a decrease of $3.2 billion, or 18%, in higher-cost time deposits.

Capital and Liquidity

The Company’s estimated capital ratios are well above current regulatory requirements with Tier 1 capital and Tier 1 common ratios increasing to an estimated 11.20% and 10.10%, respectively, at March 31, 2013. The ratios of total average equity to total average assets and tangible equity to tangible assets were 12.29% and 9.00%, respectively, at March 31, 2013, each increasing from the prior quarter and first quarter of last year. The Company continues to have substantial available liquidity provided in the form of its client deposit base and other available funding resources, as well as its portfolio of high-quality government-backed securities and cash.

During the first quarter, the Company announced capital plans in conjunction with the 2013 CCAR process and the completion of the Federal Reserve’s review of the Company’s capital plan. The Company plans to repurchase up to $200 million of its common stock between the second quarter of 2013 and the first quarter of 2014. Additionally, it has increased its quarterly common stock dividend to $0.10 per common share from $0.05 per common share, and plans to maintain dividend payments on the Company’s preferred stock. The Board of Directors had previously authorized the share repurchase, subject to the non-objection of the Company’s capital plan by the Federal Reserve.

Asset Quality

Asset quality continued to improve during the quarter, including further decreases in nonperforming loans and nonperforming assets. Nonperforming loans totaled $1.5 billion at March 31, 2013, down $80 million, or 5%, relative to year end, led by decreases in residential loans. Compared to a year ago, nonperforming loans decreased $1.2 billion, or 45%, with reductions across all loan categories, most significantly nonguaranteed residential mortgages, commercial real estate, and commercial construction. At March 31, 2013, the percentage of nonperforming loans to total loans was 1.21%, down from 2.16% at the end of the first quarter of last year, respectively. Other real estate owned totaled $223 million at the end of the current quarter, down 46% since a year ago.

Net charge-offs were $226 million during the current quarter compared to $398 million for the prior quarter and $422 million for the first quarter of last year. The prior quarter net charge-offs included $79 million related to discharged Chapter 7 bankruptcy loans and $39 million associated with nonperforming loan sales. The decrease in net charge-offs from the prior year was driven primarily by residential and commercial loans.

The ratio of annualized net charge-offs to total average loans was 0.76% for the current quarter and 1.38% for the first quarter of last year. Net charge-offs resulting from the sale of nonperforming loans and Chapter 7 bankruptcy loans added 38 basis points to the prior quarter ratio. The ratio of annualized net charge-offs to total loans ended the current quarter at its lowest level since the first quarter of 2008. The provision for credit losses was $212 million, which decreased $105 million from the first quarter of last year.

At March 31, 2013, the allowance for loan losses was $2.2 billion and represented 1.79% of total loans, down one basis point from December 31, 2012. Excluding government guaranteed loans, the allowance for loan losses was 1.93% of total loans. The $22 million decrease in the allowance for loan losses during the current quarter was primarily the result of the decrease in total loans and is also reflective of continued improvement in asset quality.

Early stage delinquencies decreased 15 basis points from the end of the prior year to 0.78% at March 31, 2013. The decrease was primarily due to residential and consumer loans. Excluding government-guaranteed loans, early stage delinquencies were 0.41%, a decrease of seven basis points from December 31, 2012.

Accruing restructured loans totaled $2.5 billion, and nonaccruing restructured loans totaled $0.7 billion at March 31, 2013. $2.9 billion of restructured loans related to residential loans, $0.2 billion were commercial loans, and $0.1 billion related to consumer loans.

BUSINESS SEGMENT FINANCIAL PERFORMANCE

Business Segment Results

The Company’s business segments include: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking. All revenue in the business segment tables is reported on a fully taxable-equivalent basis. For the business segments, 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, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Corporate Other segment also includes differences created between internal management accounting practices and generally accepted accounting principles (“GAAP”), 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 business segment results will be included in the Company’s forthcoming Form 10-Q.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust’s earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published today and SunTrust’s forthcoming Form 10-Q. Detailed financial tables and other information are also available on the Investor Relations portion of the Company’s website at www.suntrust.com/investorrelations.

Important Cautionary Statement About Forward-Looking Statements

This financial information 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 financial information. In this financial information, 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 financial information contains forward-looking statements. Statements regarding potential share repurchases and future dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,”

“estimates,” “intends,” “plans,” “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. Future dividends, and the amount of any such dividend, must be declared by our board of directors in the future in their discretion. Also, future share repurchases and the timing of any such repurchase are subject to market conditions and management’s discretion. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012 and in other periodic reports that we file with the SEC.

SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

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


	Three Months Ended March 31
	2013			2012
EARNINGS & DIVIDENDS
Net income	$	352		$	250
Net income available to common shareholders		340			245
Total revenue - FTE ^{1, 2}		2,114			2,218
Total revenue - FTE excluding securities gains, net ^{1, 2}		2,112			2,200
Net income per average common share
Diluted		0.63			0.46
Basic		0.64			0.46
Dividends paid per common share		0.05			0.05
CONDENSED BALANCE SHEETS
Selected Average Balances
Total assets	$	171,808		$	176,855
Earning assets		152,471			154,623
Loans		120,882			122,542
Consumer and commercial deposits		127,655			125,843
Brokered time and foreign deposits		2,170			2,274
Total shareholders’ equity		21,117			20,256
As of
Total assets		172,435			178,226
Earning assets		152,783			154,950
Loans		120,804			122,691
Allowance for loan and lease losses		2,152			2,348
Consumer and commercial deposits		127,735			127,718
Brokered time and foreign deposits		2,180			2,314
Total shareholders’ equity		21,194			20,241
FINANCIAL RATIOS & OTHER DATA
Return on average total assets		0.83	%		0.57	%
Return on average common shareholders’ equity		6.77			4.94
Net interest margin ²		3.33			3.49
Efficiency ratio ²		64.46			69.50
Tangible efficiency ratio ^{1, 2}		64.17			69.02
Effective tax rate		30.04			21.55
Tier 1 common equity ³		10.10			9.33
Tier 1 capital ³		11.20			11.00
Total capital ³		13.45			13.73
Tier 1 leverage ³		9.25			8.77
Total average shareholders’ equity to total average assets		12.29			11.45
Tangible equity to tangible assets ¹		9.00			8.14

Book value per common share	$	37.89		$	37.11
Tangible book value per common share ¹		26.33			25.49
Market price:
High		29.98			24.93
Low		26.93			18.07
Close		28.81			24.17
Market capitalization		15,563			13,005
Average common shares outstanding (000s)
Diluted		539,862			536,407
Basic		535,680			533,100
Full-time equivalent employees		26,238			28,615
Number of ATMs		2,882			2,914
Full service banking offices		1,574			1,651

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

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 April 19, 2013.

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

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


	Three Months Ended March 31
	2013		2012
Interest income	$	1,359	$	1,534
Interest expense		138		223

NET INTEREST INCOME		1,221		1,311
Provision for credit losses		212		317

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		1,009		994

NONINTEREST INCOME
Service charges on deposit accounts		160		164
Trust and investment management income		124		130
Retail investment services		61		59
Other charges and fees		89		97
Investment banking income		68		71
Trading income		42		57
Card fees ¹		76		79
Mortgage production related income		159		63
Mortgage servicing related income		38		81
Other noninterest income		44		57
Net securities gains		2		18

Total noninterest income		863		876

NONINTEREST EXPENSE
Employee compensation and benefits		759		797
Net occupancy expense		89		88
Outside processing and software		178		176
Equipment expense		45		45
Marketing and customer development		30		27
Amortization/impairment of intangible assets/goodwill		6		11
Operating losses		39		60
FDIC premium/regulatory exams		54		52
Other noninterest expense		163		285

Total noninterest expense		1,363		1,541

INCOME BEFORE PROVISION FOR INCOME TAXES		509		329
Provision for income taxes		151		69

INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		358		260
Net income attributable to noncontrolling interest		6		10

NET INCOME	$	352	$	250

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	340	$	245
Net interest income - FTE ²		1,251		1,342
Net income per average common share
Diluted		0.63		0.46
Basic		0.64		0.46
Cash dividends paid per common share		0.05		0.05
Average common shares outstanding (000s)
Diluted		539,862		536,407
Basic		535,680		533,100

PIN interchange fees are presented in card fees along with other interchange fee income for the three months ended March 31, 2013. Previously, these PIN interchange fees were presented in other charges and fees and therefore, for comparative purposes, $18 million of PIN interchange fees has been reclassified to card fees for the three months ended March 31, 2012.

²	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.

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

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


	March 31 2013			December 31 2012
ASSETS
Cash and due from banks	$	4,787		$	7,134
Federal funds sold and securities borrowed or purchased under agreements to resell		1,154			1,101
Interest-bearing deposits in other banks		21			22
Trading assets		6,250			6,049
Securities available for sale		23,823			21,953
Loans held for sale		3,193			3,399
Loans held for investment:
Commercial and industrial		54,343			54,048
Commercial real estate		4,261			4,127
Commercial construction		634			713
Residential mortgages - guaranteed		3,930			4,252
Residential mortgages - nonguaranteed		23,051			23,389
Residential home equity products		14,617			14,805
Residential construction		683			753
Consumer student loans - guaranteed		5,275			5,357
Consumer other direct		2,387			2,396
Consumer indirect		11,009			10,998
Consumer credit cards		614			632

Total loans held for investment		120,804			121,470
Allowance for loan and lease losses		(2,152	)		(2,174	)

Net loans held for investment		118,652			119,296
Goodwill		6,369			6,369
Other intangible assets		1,076			956
Other real estate owned		224			264
Other assets		6,886			6,899

Total assets ¹	$	172,435		$	173,442

LIABILITIES
Deposits:
Noninterest-bearing consumer and commercial deposits	$	38,593		$	39,481
Interest-bearing consumer and commercial deposits:
NOW accounts		26,736			27,617
Money market accounts		42,231			42,846
Savings		5,769			5,314
Consumer time		9,281			9,569
Other time		5,125			5,353

Total consumer and commercial deposits		127,735			130,180
Brokered time deposits		2,080			2,136
Foreign deposits		100			—

Total deposits		129,915			132,316
Funds purchased		605			617
Securities sold under agreements to repurchase		1,854			1,574
Other short-term borrowings		4,169			3,303
Long-term debt		9,331			9,357
Trading liabilities		1,348			1,161
Other liabilities		4,019			4,129

Total liabilities		151,241			152,457

SHAREHOLDERS’ EQUITY
Preferred stock, no par value		725			725
Common stock, $1.00 par value		550			550
Additional paid in capital		9,132			9,174
Retained earnings		11,133			10,817
Treasury stock, at cost, and other		(531	)		(590	)
Accumulated other comprehensive income		185			309

Total shareholders’ equity		21,194			20,985

Total liabilities and shareholders’ equity	$	172,435		$	173,442


Common shares outstanding		540,187			538,959
Common shares authorized		750,000			750,000
Preferred shares outstanding		7			7
Preferred shares authorized		50,000			50,000
Treasury shares of common stock		9,734			10,962

¹	Includes earning assets of $152,783 and $151,223 at March 31, 2013 and December 31, 2012, respectively.

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

March 31, 2013

Average
Balances

Interest
Income/
Expense

Yields/
Rates

ASSETS

Loans:

Commercial and industrial - FTE ¹

53,763

556

4.20

Commercial real estate

4,092

3.50

Commercial construction

663

3.75

Residential mortgages - guaranteed

4,079

2.62

Residential mortgages - nonguaranteed

22,386

238

4.25

Home equity products

14,363

129

3.64

Residential construction

615

4.61

Guaranteed student loans

5,397

3.92

Other direct

2,398

4.43

Indirect

10,996

3.53

Credit cards

617

9.52

Nonaccrual

1,513

2.91

Total loans

120,882

1,198

4.02

Securities available for sale:

Taxable

22,209

140

2.53

Tax-exempt - FTE ¹

294

5.22

Total securities available for sale

22,503

144

2.57

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

1,092

—

0.04

Loans held for sale

3,752

3.29

Interest-bearing deposits

—

0.13

Interest earning trading assets

4,221

1.53

Total earning assets

152,471

1,389

3.69

Allowance for loan and lease losses

(2,178

)

Cash and due from banks

4,462

Other assets

14,342

Noninterest earning trading assets

1,917

Unrealized gains on securities available for sale, net

794

Total assets

171,808

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest-bearing deposits:

NOW accounts

26,383

0.08

Money market accounts

42,995

0.15

Savings

5,527

0.06

Consumer time

9,421

1.16

Other time

5,245

1.37

Total interest-bearing consumer and commercial deposits

89,571

0.30

Brokered time deposits

2,087

2.61

Foreign deposits

—

0.15

Total interest-bearing deposits

91,741

0.35

Funds purchased

716

—

0.11

Securities sold under agreements to repurchase

1,705

0.19

Interest-bearing trading liabilities

723

2.21

Other short-term borrowings

3,721

0.29

Long-term debt

9,357

2.22

Total interest-bearing liabilities

107,963

138

0.52

Noninterest-bearing deposits

38,084

Other liabilities

4,048

Noninterest-bearing trading liabilities

596

Shareholders’ equity

21,117

Total liabilities and shareholders’ equity

171,808

Interest Rate Spread

3.17

Net Interest Income - FTE ¹

1,251

Net Interest Margin ²

3.33

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.

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
	March 31, 2012
	Average Balances			Interest Income/ Expense		Yields/ Rates
ASSETS
Loans:
Commercial and industrial - FTE ¹	$	49,542		$	599		4.86	%
Commercial real estate		4,737			44		3.72
Commercial construction		921			9		3.89
Residential mortgages - guaranteed		6,478			53		3.25
Residential mortgages - nonguaranteed		21,946			259		4.71
Home equity products		15,283			141		3.70
Residential construction		738			9		5.13
Guaranteed student loans		7,308			71		3.93
Other direct		2,100			23		4.45
Indirect		10,112			100		3.99
Credit cards		545			14		10.59
Nonaccrual		2,832			7		1.05

Total loans		122,542			1,329		4.36
Securities available for sale:
Taxable		24,250			190		3.14
Tax-exempt - FTE ¹		420			6		5.41

Total securities available for sale		24,670			196		3.17
Federal funds sold and securities borrowed or purchased under agreements to resell		731			—		0.03
Loans held for sale		2,649			25		3.70
Interest-bearing deposits		21			—		0.21
Interest earning trading assets		4,010			15		1.49

Total earning assets		154,623			1,565		4.07
Allowance for loan and lease losses		(2,428	)
Cash and due from banks		4,563
Other assets		14,893
Noninterest earning trading assets		2,260
Unrealized gains on securities available for sale, net		2,944

Total assets	$	176,855

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts	$	25,262		$	6		0.10	%
Money market accounts		42,489			25		0.24
Savings		4,860			1		0.12
Consumer time		11,472			44		1.54
Other time		6,368			28		1.69

Total interest-bearing consumer and commercial deposits		90,451			104		0.46
Brokered time deposits		2,265			23		4.03
Foreign deposits		9			—		0.13

Total interest-bearing deposits		92,725			127		0.55
Funds purchased		871			—		0.10
Securities sold under agreements to repurchase		1,634			1		0.14
Interest-bearing trading liabilities		531			2		1.73
Other short-term borrowings		9,170			5		0.20
Long-term debt		11,356			88		3.13

Total interest-bearing liabilities		116,287			223		0.77
Noninterest-bearing deposits		35,392
Other liabilities		3,893
Noninterest-bearing trading liabilities		1,027
Shareholders’ equity		20,256

Total liabilities and shareholders’ equity	$	176,855

Interest Rate Spread							3.30	%

Net Interest Income - FTE ¹				$	1,342

Net Interest Margin ²							3.49	%

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

SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013			2012
CREDIT DATA
Allowance for credit losses - beginning	$	2,219		$	2,505
Provision for unfunded commitments		8			4
Provision for loan losses:
Commercial		64			38
Residential		112			258
Consumer		28			17

Total provision for loan losses		204			313

Charge-offs:
Commercial		(60	)		(126	)
Residential		(178	)		(302	)
Consumer		(35	)		(35	)

Total charge-offs		(273	)		(463	)

Recoveries:
Commercial		15			25
Residential		22			5
Consumer		10			11

Total recoveries		47			41

Net charge-offs		(226	)		(422	)

Allowance for credit losses - ending	$	2,205		$	2,400

Components:
Allowance for loan and lease losses	$	2,152		$	2,348
Unfunded commitments reserve		53			52

Allowance for credit losses	$	2,205		$	2,400

Net charge-offs to average loans (annualized):
Commercial		0.32	%		0.72	%
Residential		1.48			2.57
Consumer		0.52			0.48

Total net charge-offs to total average loans		0.76	%		1.38	%

Period Ended
Nonaccrual/nonperforming loans:
Commercial	$	289		$	815
Residential		1,157			1,812
Consumer		21			22

Total nonaccrual/nonperforming loans		1,467			2,649
Other real estate owned (“OREO”)		223			411
Other repossessed assets		9			14
Nonperforming loans held for sale (“LHFS”)		41			60

Total nonperforming assets	$	1,740		$	3,134

Accruing restructured loans	$	2,499		$	2,750
Nonaccruing restructured loans		655			714
Accruing loans past due > 90 days (guaranteed)		767			2,088
Accruing loans past due > 90 days (non-guaranteed)		56			64
Accruing LHFS past due > 90 days		2			3
Nonperforming loans to total loans		1.21	%		2.16	%
Nonperforming assets to total loans plus OREO, other repossessed assets, and nonperforming LHFS		1.44			2.54
Allowance to period-end loans ^1,2		1.79			1.92
Allowance to period-end loans, excluding government guaranteed loans ^1,2,3		1.93			2.16
Allowance to nonperforming loans ^1,2		148			89
Allowance to annualized net charge-offs ¹		2.34x			1.38x

¹	This ratio is computed using the allowance for loan and lease losses.

²	Loans carried at fair value were excluded from the calculation.

³	See Appendix A for reconciliation of non-GAAP performance measures.

SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	Core Deposit Intangibles			MSRs - Fair Value			Other			Total
OTHER INTANGIBLE ASSET ROLLFORWARD
Balance, beginning of period	$	38		$	921		$	58		$	1,017
Amortization		(6	)		—			(5	)		(11	)
Mortgage servicing rights (“MSRs”) originated		—			83			—			83
Fair value changes due to inputs and assumptions		—			124			—			124
Other changes in fair value		—			(57	)		—			(57	)
Sale of MSRs		—			(1	)		—			(1	)

Balance, March 31, 2012	$	32		$	1,070		$	53		$	1,155

Balance, beginning of period	$	17		$	899		$	40		$	956
Amortization		(3	)		—			(3	)		(6	)
MSRs originated		—			110			—			110
Fair value changes due to inputs and assumptions		—			90			—			90
Other changes in fair value		—			(74	)		—			(74	)

Balance, March 31, 2013	$	14		$	1,025		$	37		$	1,076

SunTrust Banks, Inc. and Subsidiaries

RECONCILEMENT OF NON-GAAP MEASURES

APPENDIX A TO THE FINANCIAL INFORMATION

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


	Three Months Ended
	March 31 2013			March 31 2012
NON-GAAP MEASURES PRESENTED IN THE FINANCIAL INFORMATION ¹
Net interest income	$	1,221		$	1,311
Taxable-equivalent adjustment		30			31

Net interest income - FTE		1,251			1,342
Noninterest income		863			876

Total revenue - FTE		2,114			2,218
Securities gains, net		(2	)		(18	)

Total revenue - FTE excluding net securities gains ²	$	2,112		$	2,200

Efficiency ratio ³		64.46	%		69.50	%
Impact of excluding amortization of intangible assets		(0.29	)		(0.48	)

Tangible efficiency ratio ⁴		64.17	%		69.02	%

Total shareholders’ equity	$	21,194		$	20,241
Goodwill, net of deferred taxes of $169 million and $164 million, respectively		(6,200	)		(6,180	)
Other intangible assets, net of deferred taxes of $5 million and $14 million, respectively, and MSRs		(1,071	)		(1,142	)
MSRs		1,025			1,070

Tangible equity		14,948			13,989
Preferred stock		(725	)		(275	)

Tangible common equity	$	14,223		$	13,714

Total assets	$	172,435		$	178,226
Goodwill		(6,369	)		(6,344	)
Other intangible assets including MSRs		(1,076	)		(1,155	)
MSRs		1,025			1,070

Tangible assets	$	166,015		$	171,797

Tangible equity to tangible assets ⁵		9.00	%		8.14	%
Tangible book value per common share ⁶	$	26.33		$	25.49

Total loans	$	120,804		$	122,691
Government guaranteed loans		(9,205	)		(13,633	)
Loans held at fair value		(360	)		(413	)

Total loans, excluding government guaranteed and fair value loans	$	111,239		$	108,645

Allowance to total loans, excluding government guaranteed and fair value loans ⁷		1.93	%		2.16	%

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.

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.

Computed 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.

⁴

SunTrust 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.

⁵

SunTrust 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.

⁶

SunTrust 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 a ratio of allowance to total loans, excluding government guaranteed and fair value loans, to exclude loans from the calculation that are held at fair value with no related allowance and loans guaranteed by a government agency that do not have an associated allowance recorded due to nominal risk of principal loss.

SunTrust Banks, Inc. and Subsidiaries

CONSUMER BANKING AND PRIVATE WEALTH MANAGEMENT

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013		2012
Statements of Income:
Net interest income ¹	$	602	$	634
FTE adjustment		—		—

Net interest income - FTE		602		634
Provision for credit losses ²		99		155

Net interest income - FTE - after provision for credit losses		503		479

Noninterest income before securities gains		326		339
Securities gains, net		—		—

Total noninterest income		326		339

Noninterest expense before amortization/impairment of intangible assets/goodwill		669		721
Amortization/impairment of intangible assets/goodwill		5		10

Total noninterest expense		674		731

Income before provision for income taxes		155		87
Provision for income taxes		57		32
FTE adjustment		—		—

Net income including income attributable to noncontrolling interest		98		55
Less: net income attributable to noncontrolling interest		—		—

Net income	$	98	$	55


Total revenue - FTE	$	928	$	973
Selected Average Balances:
Total loans	$	39,781	$	41,513
Goodwill		3,955		3,930
Other intangible assets excluding MSRs		41		73
Total assets		44,556		46,285
Consumer and commercial deposits		77,947		76,902
Other Information (End of Period): ³
Assets under administration
Managed (discretionary) assets	$	63,091	$	63,950
Non-managed assets		42,033		52,963

Total assets under administration		105,124		116,913

Brokerage assets		41,257		37,715

Total assets under advisement	$	146,381	$	154,628

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	Reflects the assets under administration/advisement for GenSpring and Private Wealth Management clients.

SunTrust Banks, Inc. and Subsidiaries

WHOLESALE BANKING

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013		2012
Statements of Income:
Net interest income ¹	$	433	$	424
FTE adjustment		29		29

Net interest income - FTE		462		453
Provision for credit losses ²		37		101

Net interest income - FTE - after provision for credit losses		425		352

Noninterest income before securities gains		337		363
Securities gains, net		—		—

Total noninterest income		337		363

Noninterest expense before amortization of intangible assets		425		486
Amortization of intangible assets		1		1

Total noninterest expense		426		487

Income - FTE - before provision for income taxes		336		228
Provision for income taxes		75		33
FTE adjustment		29		29

Net income including income attributable to noncontrolling interest		232		166
Less: net income attributable to noncontrolling interest		4		8

Net income	$	228	$	158


Total revenue - FTE	$	799	$	816
Selected Average Balances:
Total loans	$	53,044	$	50,214
Goodwill		2,414		2,414
Other intangible assets excluding MSRs		12		15
Total assets		66,226		63,599
Consumer and commercial deposits		46,182		45,688
Other Information (End of Period): ³
Managed (discretionary) assets under administration	$	44,620	$	43,443

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	Reflects the assets under administration for Ridgeworth clients.

SunTrust Banks, Inc. and Subsidiaries

MORTGAGE BANKING

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013			2012
Statements of Income:
Net interest income ¹	$	127		$	126
FTE adjustment		—			—

Net interest income - FTE		127			126
Provision for credit losses ²		90			166

Net interest income - FTE - after provision for credit losses		37			(40	)

Noninterest income before securities losses		198			157
Securities losses, net		—			—

Total noninterest income		198			157

Noninterest expense before amortization of intangible assets		271			333
Amortization of intangible assets		—			—

Total noninterest expense		271			333

Loss before benefit for income taxes		(36	)		(216	)
Benefit for income taxes		(15	)		(86	)
FTE adjustment		—			—

Net loss including income attributable to noncontrolling interest		(21	)		(130	)
Less: net income attributable to noncontrolling interest		—			—

Net loss	($	21	)	($	130	)


Total revenue - FTE	$	325		$	283
Selected Average Balances:
Total loans	$	27,996		$	30,796
Goodwill		—			—
Other intangible assets excluding MSRs		—			—
Total assets		33,185			35,235
Consumer and commercial deposits		3,517			3,199
Mortgage Servicing Data (End of Period):
Total loans serviced	$	142,320		$	155,351
Total loans serviced for others		111,973			121,444

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.

SunTrust Banks, Inc. and Subsidiaries

CORPORATE OTHER

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013			2012
Statements of Income:
Net interest income	$	59		$	127
FTE adjustment		1			2

Net interest income - FTE		60			129
Provision for credit losses ¹		(14	)		(105	)

Net interest income - FTE - after provision for credit losses		74			234

Noninterest (loss)/income before securities gains		—			(1	)
Securities gains, net		2			18

Total noninterest income		2			17

Noninterest expense before amortization of intangible assets		(8	)		(10	)
Amortization of intangible assets		—			—

Total noninterest expense		(8	)		(10	)

Income - FTE - before provision for income taxes		84			261
Provision for income taxes		34			90
FTE adjustment		1			2

Net income including income attributable to noncontrolling interest		49			169
Less: net income attributable to noncontrolling interest		2			2

Net income	$	47		$	167


Total revenue - FTE	$	62		$	146
Selected Average Balances:
Total loans	$	61		$	19
Securities available for sale		22,315			24,462
Other intangible assets excluding MSRs		—			3
Total assets		27,841			31,736
Consumer and commercial deposits		9			54

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

SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED - SEGMENT TOTALS

(Dollars in millions) (Unaudited)


	Three Months Ended March 31
	2013		2012
Statements of Income:
Net interest income	$	1,221	$	1,311
FTE adjustment		30		31

Net interest income - FTE		1,251		1,342
Provision for credit losses		212		317

Net interest income - FTE - after provision for credit losses		1,039		1,025

Noninterest income before securities gains		861		858
Securities gains, net		2		18

Total noninterest income		863		876

Noninterest expense before amortization/impairment of intangible assets/goodwill		1,357		1,530
Amortization/impairment of intangible assets/goodwill		6		11

Total noninterest expense		1,363		1,541

Income - FTE - before provision for income taxes		539		360
Provision for income taxes		151		69
FTE adjustment		30		31

Net income including income attributable to noncontrolling interest		358		260
Less: net income attributable to noncontrolling interest		6		10

Net income	$	352	$	250


Total revenue - FTE	$	2,114	$	2,218
Selected Average Balances:
Total loans	$	120,882	$	122,542
Goodwill		6,369		6,344
Other intangible assets excluding MSRs		53		91
Total assets		171,808		176,855
Consumer and commercial deposits		127,655		125,843
Other Information (End of Period):
Assets under administration
Managed (discretionary) assets	$	107,711	$	107,393
Non-managed assets		42,033		52,963

Total assets under administration		149,744		160,356

Brokerage assets		41,257		37,715

Total assets under advisement	$	191,001	$	198,071